YP75: A case of safety first as many investors err on side of caution

Weak energy markets led to a drop in full-year profits for electricity giant Drax. The company, which produces about 7 per cent of the UK's electricity supply, posted pre-tax profits of 158m over the year, compared with 443m the previous year, a drop of 64 per cent.

Drax, which operates the UK's largest coal-fired power station, blamed falling gas prices for the drop in revenues and profits which makes it cheaper for gas fired electricity producers to run their stations.

The statement also confirmed Drax's desire for an increase in government subsidies in the biomass market.

Leeds property company Town Centre Securities delivered a profit before tax of more than 30m for the final six months of 2009 but remains cautious on the outlook for 2010. The group's net asset value per share was 257p as at the year end, a 55p increase over the six-month period.

Animalcare Group, which supplies pharmaceutical goods to vets throughout the UK, announced plans to launch up to 10 new medicines over the next two years as it reported

an increase in profits to more than 500,000 for the past six months. This was driven by rising sales of its three main drugs, Benazecare, Buprecare and Cephacare.

Croda International, a leading provider of specialist chemicals, reported pre-tax profit of 89m last week on sales of more than 900m.

The final dividend is up by nearly 11 per cent which takes the full-year payment to 21.5p per share. Net debt was reduced by about 27 per cent, and the board is confident of continuing to achieve further progress in the year ahead.

The order book at precision engineer The 600 Group received a welcome boost in the final quarter of 2009 as order intake levels increased by 20 per cent, producing a rise in revenue of 25 per cent on the previous quarter.

The group is the largest machine tool company in the UK and also has operations in the US and mainland Europe. Cost savings previously implemented by the board have led to an increase in margins to 33 per cent and the board is seeking further opportunities to further improve trading performance.

Finally, Minorplanet Systems, the Leeds-based provider of vehicle management information, reported a pre-tax loss of 3.8m compared to a profit of nearly 2m a year earlier.

The group claimed the financial year had been "exceptionally difficult", citing falling demand from small and mid-sized companies alongside significant tightening of bank lending.

The financial outlook for the company remains challenging despite significant cost saving. Overheads from UK operations have dropped by 45 per cent and staff levels have been cut by 40 per cent.

David Cadwallader, Assistant Investment Manager at Brewin Dolphin, Leeds