Broker N+1 Singer says it is confident that the company will return to earnings growth in 2017
Companies: Elementis plc
Elementis shares rose 5% on Tuesday after the FTSE250 chemicals firm told investors it had made a good start to the year in a Q1 trading update.
The Group said its first quarter had been underpinned by stronger demand across most markets compared to last year, with notably strong growth in the Personal Care and Energy business sectors.
Broker N+1 Singer said it was confident that 2017 would see the company return to earnings growth after the challenges of 2016.
"It has been a busy period strategically with the sale of the non-core US colourants business and the closure of the Jersey City facility, as well as the significant acquisition of SummitReheis. The SummitReheis deal closed on 24th March, three months earlier than originally planned, prompting a 5% earnings upgrade to FY17 this morning. In our view prospects for the coming years are bright and Elementis remains a Best Idea for 2017."
Elementis said it was a positive start, and reiterated that the Company remained on track to grow operating profit across its three segments in 2017.
Paul Waterman, Elementis CEO, said that while uncertainties exist, he believed continued focus on implementing the firm's strategy would underpin continued progress in 2017:
“We are off to a good start in 2017 as trading was strong across our businesses. Last November we committed to reignite growth at Elementis by focusing on four strategic priorities: pursuing the best growth opportunities, transforming our global supply chain, innovating for distinctiveness and high margins and creating a culture of high performance."
Elementis shares have risen 35% in the past year, and are up about 12% in 2017 so far. Consensus forecasts are expecting the firm to hit revenues around £754m, with a net profit of £86m.
It EPS is expected to grow to 0.19p, the first earnings growth in two years (albeit lower than the 0.36p recorded in 2014).
