Elementis (ELM) brushed off the shutdown at its chromium plant at the beginning of 2013 to deliver its fourth consecutive year of record earnings. Double-digit growth at the chemical company's core speciality products division generated almost twice the amount of cash expected, paving the way for a 22 per cent hike in the special dividend.
Speciality sales grew 10 per cent, or 8 per cent before a currency benefit, to $503m (£301m). Demand for additives used in both shale and deepwater drilling, up 14 per cent, was a major driving force. So, too, was the 26 per cent surge at personal care, driven by growth in Brazil and China as well as new products launched at the Paris cosmetics show. Sales of industrial coatings, which make up more than half the business, grew 7 per cent as Asia and North America made up for shrinking sales in Europe.
The uptick in economic activity widely forecast for the continent would be a clear boon for Elementis. Margins have recovered at the chromium business, too, and another shutdown planned for the second half will not have the same impact. "We're reasonably positive about 2014," finance boss Brian Taylorson told us. Broker N+1 Singer expects adjusted pre-tax profit of $146m this year, giving EPS of 24.6¢ (from $136m and 23¢ in 2013).
ELEMENTIS (ELM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 271p | MARKET VALUE: | £1.24bn | |
| TOUCH: | 270-271p | 12-MONTH HIGH: | 281p | LOW: 209p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 19 | |
| NET ASSET VALUE | 119¢* | NET CASH: | $54.1m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 564 | -48 | -12.9 | 4.5 |
| 2010 | 697 | 96 | 16.7 | 4.94 |
| 2011 | 761 | 162 | 27.8 | 7 |
| 2012** | 757 | 133 | 22.2 | 7.77 |
| 2013** | 777 | 134 | 23.3 | 8.07 |
| % change | +3 | +1 | +5 | +4 |
Ex-div: 30 Apr Payment: 30 May *Includes intangible assets of $382m, or 83¢ a share **Excludes special dividend of 4.79¢ for 2012 and 5.86¢ for 2013 £1=$1.67 | ||||
