For Elementis (ELM), 2015 was clouded by the economic slowdown in China. This weighed on demand for products from the speciality chemicals group, including a range designed to improve the consistency of paint. Moreover, a depressed US shale market weakened appetite for the group's additives used in drilling. With the strengthening US dollar also hitting the competitiveness of core customers, it was little surprise to see an end to five successive years of adjusted profit growth.
Recently installed chief executive Paul Waterman will be mindful of the few bright spots to emerge from this otherwise disappointing set of numbers, including a positive reaction to product innovation. The introduction of a new line of acrylic thickeners, which were produced in a recently opened facility, drove 15 per cent constant-currency sales growth in North American decorative coatings. And after a difficult start to the year, the arrival of fresh hair, skin and nailcare products cemented a 3 per cent rise in constant-currency revenues for the personal care unit.
Equally encouraging was the health of the balance sheet. By selling a portion of its site in Texas and making lower pension contributions, the group finished the year with $10m (£7.2m) more cash. Some of those proceeds were used to reward shareholders with yet another special dividend.
Broker N+1 Singer expects adjusted 2016 pre-tax profit of £115m and adjusted EPS of 20.3p, down from £116m and 20.8p respectively in 2015.
| ELEMENTIS (ELM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 231p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 230-231p | 12-MONTH HIGH: | 319p | LOW: 197p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 142¢* | NET CASH: | $74m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 761 | 162 | 27.8 | 7.00 |
| 2012 | 757 | 133 | 22.2 | 7.77 |
| 2013 | 777 | 134 | 23.3 | 8.07 |
| 2014 | 790 | 148 | 38.1 | 8.45 |
| 2015 | 679 | 122 | 20.6 | 8.45 |
| % change | -14 | -18 | -46 | - |
Ex-div: 28 Apr Payment: 27 May *Includes intangible assets of $363m, or 78¢ a share **Excludes special dividends of 4.79¢ for 2012, 5.86¢ for 2013, 6.95¢ for 2014 and 8¢ for 2015 £1=$1.40 | ||||
