Slowdown hits group used to the fast lane

Umeco, which makes composite materials for Formula One racing cars, said the ongoing effect of the slowdown in markets served by its composites business created a higher-than-normal level of uncertainty for its full-year outlook.

Analysts take this to mean 24m of underlying profits for the group, which employs 50 people at its process materials Aerovac factory in Keighley, West Yorkshire.

"While there continue to be short-term challenges for the group and the timing of recovery remains uncertain, we serve growth markets and our medium and long-term prospects are robust," said chief executive Clive Snowdon.

"In the near term, we continue to be vigilant to changing conditions in order to minimise the impact upon the group of the weak economic environment while taking opportunities to enhance our market share."

The group said while its orders and revenues in its composites business are below last year, it has seen some recovery in the wind energy market. Some previously deferred orders have also started to feed through from Formula One teams as uncertainties over specifications for the 2010 season have been resolved.

However, other key markets of automotive and marine remain depressed, and Umeco has seen a "hiatus" in ballistics activity.

The group added it is mulling options, including a sale of

its small South African plant, which is winding down activity as the Mercedes McLaren SLR supercar programme comes to an end.

The group's supply chain business continues to experience good demand.