Elementis pleased with performance after disposal of surfactants business
Elementis
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16:40 17/05/24
Elementis reported a “good first half performance” in its interim results on Tuesday, with revenue from continuing operations up 10% to $421m, driven by performance in personal care and coatings.
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The FTSE 250 specialty chemicals company said its statutory operating profit increased 10% to $56m, and adjusted operating profit rose 16% to $68m, with improved profitability in coatings along with growth in the high-margin personal care business, despite raw material cost inflation.
It reportedly saw continued strong cash generation, with its net debt-to-adjusted EBITDA ratio reducing to 1.7x from 2.3x as at 30 June last year.
The board declared an interim dividend of 2.95c per share, up 9% on the prior year.
Looking at its portfolio, Elementis said its new segmental reporting improved performance transparency across its business segments, with personal care being the highest operating margin business, representing around 40% of first half 2018 adjusted operating profit.
It confirmed the surfactants disposal was now completed as planned, reallocating capital and resources to higher margin growth opportunities.
On its outlook, the Elementis board said it saw positive momentum moving into the second half, leaving its 2018 outlook unchanged, saying it expected continued strategic and financial progress.
“Our strategy to reignite growth at Elementis is delivering and there is strong momentum in the business,” said chief executive officer Paul Waterman.
“The work we have been doing to focus the business portfolio, drive working capital initiatives, and simplify our supply chain have enabled us to focus our capital and resources on higher margin growth opportunities.”
Waterman said the adjusted operating profit growth of 16% to $68m, driven by personal care and coatings, was a “good” first half performance.
“Looking forward, we see positive momentum moving into the second half of the year and are confident of making strategic and financial progress in 2018 and over the long term.”