By Iain Gilbert
Date: Tuesday 23 Mar 2021
LONDON (ShareCast) - (Sharecast News) - Diversified chemicals group Elementis said on Tuesday that despite demand recovering in the second half of the year, revenues and adjusted pre-tax profits were both expected to have recorded double-digit declines in 2020.
Elementis now expects to report full-year revenues 14% lower than the prior-year at $751.0m, principally due to Covid-19 related volume impact across industrial and consumer end markets, while adjusted pre-tax profits were pegged to be $53.0m, down 44% on the prior year.
The FTSE 250-listed firm also warned that it foresees a statutory loss after tax of $67.0m, primarily due to non-cash goodwill impairments across energy and talc assets booked in the first half due to Covid-19 impacts.
Adjusted operating profits were down 34% at $82.0m, in line with expectations, with good coatings performance, pricing resilience and cost savings offset by lower volumes.
Net debt was reduced by $46.0m to $408.0m due to a strong operating cash conversion of 137% and the suspension of the group's dividend.
Looking forward, Elementis said it had made "an encouraging start" to 2021, but added it was cautious on its outlook due to the Covid-19 dynamic.
Chief executive Paul Waterman said: "We will continue to maintain our focus on self-help actions to optimise performance, and in 2021 expect to deliver more than $30.0m of new business opportunities, over 20 new products and $10.0m of cost savings.
"The fundamentals of our business remain strong and we have high-quality assets with enduring competitive advantages. I am confident that the implementation of our Innovation, Growth and Efficiency strategy, in combination with our self-help actions, will position Elementis to capture growth, deliver our medium-term financial ambitions and generate significant shareholder value".
As of 0845 GMT, Elementis shares were down 2.42% at 121.0p.
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