4th Mar 2020 08:41
(Alliance News) - Elementis PLC on Wednesday posted a fall in profit for 2019, blaming weakened market demand as the reason for its "disappointing financial performance".
The stock was trading 3.7% higher at 101.80 pence each on Wednesday morning in London.
The FTSE 250-listed specialty chemicals firm posted pretax profit of USD61.0 million, down 6.7% from USD65.4 million reported for 2018. Revenue rose 6.3% to USD873.6 million from USD822.2 million.
Operating profit improved by 19% to USD100.9 million from USD84.9 million. But Elementis recorded a USD9.0 million loss on disposal, versus no such hit in 2018, while finance cost rose to USD29.8 million from USD18.2 million.
The company said its Coatings business was hurt by weaker industrial production and destocking. The Personal Care division recorded growth in the Cosmetics business but saw competitive pressures in AP Actives. The Chromium and Energy businesses were also hurt by weak industrial production and lower drilling activity.
Despite reduced profit, Elementis increased its dividend payout to 8.55 US cents, up 1.8% from the payout of 8.40 cents the year prior.
Looking ahead, the London-based company said it expects stable performance but warned that it remains conscious about how the coronavirus outbreak and the challenging marketing backdrop might affect trading in 2020.
"Stable performance is expected, supported by the delivery of cost savings and new business opportunities. Looking forward, we see a clear deleveraging profile for the group as a result of strong underlying cash generation and the impact of our cash-focused strategic initiatives, said Chief Executive Paul Waterman.
"Overall progress in Personal Care, Coatings and Talc is expected to be offset by challenging market conditions in Chromium," he added.
By Ife Taiwo; [email protected]
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