Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
21 Oct 2013 Elementis PLC ELM Canaccord Genuity Buy 250.35 247.30 275.00 275.00 Reiterates
Broker Update.... 21 Oct 2013 Elementis PLC ELM Berenberg Buy 247.30 247.30 290.00 285.00 Reiterates SP TARGET 285p.
Elementis, the FTSE 250 speciality chemicals group, has agreed, through its wholly owned subsidiary Elementis Specialties, to acquire the assets of Hi-Mar Specialty Chemicals, a US coatings additives company. The $33m purchase has been made to further expand the company's product and technical service offering in these high value segments. Group Chief Executive, David Dutro, said: "The acquisition of Hi-Mar Specialty Chemicals broadens our capabilities in value added, higher margin defoamer markets. Our two businesses share a common commitment to serving customers with innovative solutions and technologies, and Hi-Mar's complementary product portfolio, customer service culture and the opportunity to leverage newly acquired technologies globally make it an excellent addition to our Specialty Products business. "This is an exciting time for Elementis and, due to the cash generative nature of our company, we are able to comfortably finance both organic growth and these bolt-on acquisitions. Consequently, this transaction will not affect the special dividend to be announced with the preliminary results on February 26th 2013." For the 12 months ended December 31st 2012, the acquired business reported, on an unaudited basis, sales of $14.5m and earnings before interest, tax, depreciation and amortisation of $3.5m.
Elementis: Barclays moves target price from 188p to 203p and retains an underweight rating.
Elementis: Goldman Sachs cuts target from 278p to 255p, neutral ratin kept.
Mixed trading on the whole Overall, sales in Speciality Products rose by 2% on a constant currency basis in the quarter, while the Chromium business experienced a 5% decline in sales volumes due to lower sales of chrome oxide for use in metal alloys in Europe. Both divisions have seen operating margins decline in the third quarter, with the first half, but this does not reflect any structural changes in pricing or contribution margin, the firm said. Elementis said: "Elementis continues to benefit from its strategy of supplying high value products and technical service to a broad range of end markets, while progressively expanding its portfolio of high value products and its geographic presence in high growth regions. "This strategy continues to enable the group to deliver resilient earnings in the current environment of global economic uncertainty and dynamic end market demand."
Speciality chemicals group Elementis said it remains on track to hit earnings per share (EPS) forecasts this year due to a lower tax rate, but headline operating profits will be hit by a temporary slowdown in oilfield drilling. The company, which provides functional additives to many markets including architectural and industrial coatings, personal care and oilfield drilling, said it saw a reduction in demand in oilfield drilling during the third quarter on the back of a slowdown in shale drilling activity in North America and a late start to the Canadian drilling season. Oilfield drilling - part of the Speciality Products division - accounts for 15% of group sales. Elementis said: "This combined with some short term inventory adjustments by the major oil service companies, led to sales in the quarter being 23% lower than the previous year. However, the underlying fundamentals for this sector remain positive and the group expects to continue to benefit from attractive growth rates going forward." As such, the company said that group operating profit for the full year, "although comfortably ahead of the previous year", will be adversely affected by this slowdown. However, due to a lower-than-initially-expected group tax charge of 26-27%, full-year EPS will be in line with market expectations. Despite the disappointment, the company reassured that investors will continue to see benefits of its strong cash generation. The firm currently expects to have a net cash position at the year-end of $50m and, as previously announced, intends to distribute up to 50% of this as a special dividend.
Specialist chemicals company Elementis said it had completed its purchase of Brazilian firm Watercryl Quimica, giving it a bigger foothold in a rapidly growing market. Elementis bought the coatings additives company for $24m in cash, in a deal announced in June. The British firm hopes to combine the market positions, technical capabilities and product portfolios of Watercryl and its Specialty Products division to expand sales of Watercryl products beyond Brazil and to accelerate the growth of Elementis products within the country. Watercryl generated sales of $9.3m and EBITDA (earnings before interest, tax, depreciation and amortisation) of $2.3m in the year to May 31st. The company was formed in 1993 and supplies additives to the Brazilian coatings industry, with manufacturing and technical facilities based in Palmital, São Paulo.
According to Bloomberg, Aviva has received offers of more than 1bn dollars from Apollo Global Management, Harbinger Capital Partners and Guggenheim Partners for a US life insurance divison. Bloomberg's anonymous sources for this news revealed that the bidders have held talks with other investors about forming groups to share the cost of the purchase. These firms have been buying unwanted operations from life insurers since 2009, partly to access stable funds for their investment-management operations. Aviva, with a market cap of approximately 9.4bn pounds, has been selling and closing businesses in an effort to exist less profitable markets and increase its capital reserves.
Elementis announces completion of its acquisition of Watercryl Quimica Ltda. Elementis plc (ELM.L) ("Elementis"), the FTSE 250 Global Specialty Chemicals Company, is pleased to announce that the acquisition of Watercryl Quimica Ltda., which was announced on 26 June 2012, was completed in Sao Paulo on Friday 28 September 2012.
Speciality chemicals group Elementis has said that in response to market demand it is planning to expand production capacity for speciality rheological additives and dispersants for water-based coatings at an industrial park owned by Bayer MaterialScience in New Martinsville, West Virginia. Construction is already underway and production is die to begin in the fourth quarter of this year. "We are pleased to expand our presence in West Virginia," said Greg McClatchy, Elementis Specialties President. "The site has easy access to railroads and major highways as well as excellent infrastructure, a skilled workforce and a business-friendly climate. We are looking forward to the opportunities this new location presents for Elementis and for our customers in the coatings industry."
Berenberg initiates buy on Elementis, target price 260p.
The healthy cash position has encouraged the group to institute a special dividend programme that will provide a return to shareholders of up to 50% of year-end net cash on the balance sheet. That's in addition to the group's commitment to a progressive regular dividend which will see pay-outs roughly a third of earnings per share before exceptional items. The interim dividend of 2.45 cents per share is equivalent to a sterling amount of 1.5643 pence per share and represents an increase of 5% over the dividend declared at this time last year. "The board is confident that the group is well placed to generate further shareholder value over the medium term, and expects to make progress in the second half of 2012," revealed Robert Beeston,
Results from speciality chemicals group Elementis galvanised the share price on Tuesday after the cash-rich group announced plans to return surplus funds to shareholders on a regular basis. Profit before tax in the first half of 2012 rose 12% to $79.0m from $70.6m the year before, on the back of a marginal improvement in revenue to $401.3m from $396.0m in the first half of 2011. The operating margin improved considerably, from 18.2% in the first half of last year to 20.1% in the first half of this, as the strategy of replacing sales of low margin surfactants with value added coatings additives continued. "Elementis has delivered another record financial performance in the first half of 2012," trumpeted Elementis Chief Executive, David Dutro. The group ended the reporting period sitting on $29.9m of cash, a sharp turnaround from a year earlier when it had net debt of $54.4m.
Commenting on the results, Group Chief Executive, David Dutro said: "Elementis has delivered another record financial performance in the first half of 2012. Achievement of these results during a period of significant global uncertainty provides further evidence of the resilience and inherent quality of our business. The disciplined implementation of our growth strategy, the strength of our market position and the added value nature of our product portfolio are all evidenced by these results. We have continued to transform the Group, particularly through our strategic actions in Specialty Products. We were pleased to announce in May plans to build a specially designed US facility that will manufacture our highly innovative and patent protected products which will drive growth in the decorative coatings market. In June we announced the acquisition of Watercryl, a Brazilian coatings additives company. This acquisition provides us with the opportunity to extend our innovative product portfolio to the Latin America market. Given the Group's robust balance sheet position and the strongly cash generative nature of our businesses, the Board has announced that, in addition to the current progressive dividend policy, a special dividend programme will be instituted that will provide a return to shareholders of up to 50 per cent of year end net cash on the balance sheet. We are well positioned to further enhance shareholder value through our key growth strategies of geographic expansion, market share gain, new product development and bolt-on acquisitions, and expect to make further progress in the second half of 2012."
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2012 Elementis plc (ELM.L) ("Elementis", the "Company" or the "Group"), the FTSE 250 Global Specialty Chemicals Company, announces its results for the six months ended 30 June 2012. HIGHLIGHTS · Total revenue increased, with good organic growth in both of our core businesses: o Specialty Products up 4 per cent despite the downturn in Europe. o Chromium up 9 per cent. · Group operating profit increased by 12 per cent. · Group operating margins improved from 18.2 per cent to 20.1 per cent. · Earnings per share increased by 15 per cent. · Continuing investment in Specialty Products growth, including recently announced acquisition in Brazil. · Further strong cash generation, with net cash of $29.9 million at the period end. · Special dividend programme announced to further enhance shareholder returns, returning up to 50 per cent of year end net cash on the balance sheet.
http://www.investegate.co.uk/Article.aspx?id=201207310700108542I
Further endorsement here today.
Goldman Sachs initiates buy on Elementis, target price 245p.
N+1 Brewin continues to hold an "add" rating on Elementis (ELM) with a 220p price target, commenting that the recent acquisition of of Brazilian coating additives firm Watercryl provides a platform for growth in South America. The firm is paying 24 million dollars - 10 times 2012 EBITDA - for the target, and while only expected to increase next year's earnings per share by 1%, it is important strategically given the cross selling opportunities provided. The broker believes the deal has been well received and notes the balance sheet is in 'excellent shape', aiding the firm's ambition to complete further acquisitions. Elementis shares crept 6.4p higher to 194.3p.
Commenting on the transaction Group Chief Executive, David Dutro, said: "This acquisition represents significant progress in extending our reach into the fast growing and increasingly sophisticated Latin America coatings market. Watercryl has a strong presence in Brazil in terms of its product portfolio and manufacturing capabilities and has established an impressive reputation over the past 20 years for exceptional technical service, making it an excellent addition to our Specialty Products Division. Listening to customers' needs and doing whatever it takes to meet them is a philosophy that Watercryl and Elementis share. This acquisition is in perfect sync with our strategy, the opportunity to leverage an expanded, high value and innovative product portfolio to our Latin America customers provides an enviable platform for growth. This is an exciting time for Elementis and we will continue to drive profitable growth both organically and by continuing to look for attractive investment opportunities in the higher growth regions around the world."
Elementis - Acquisition of Watercryl Quimica Ltda for $24 million Elementis plc (ELM.L) ("Elementis" or the "Company") today announces that it has agreed, through its wholly owned subsidiary Elementis Holdings Limited, to purchase Watercryl Quimica Ltda ('Watercryl'), a Brazilian coatings additives company, for a cash consideration of $24 million. Watercryl was established in 1993 and is a leading supplier of additives to the Brazilian coatings industry, with manufacturing and technical facilities based in Palmital, São Paulo. The acquisition of Watercryl will significantly increase the Company's presence in Latin America and provide a platform for its Specialty Products business to accelerate growth in the region. For the 12 months ended 31 May 2012 Watercryl reported, on an unaudited basis, sales of $9.3 million and EBITDA of $2.3 million. Further growth will be driven by combining the market positions, technical capabilities and product portfolios of the two businesses, to expand sales of Watercryl products beyond Brazil and to accelerate the growth of Elementis products in Brazil. The transaction is expected to close during the second half of 2012.
http://www.investegate.co.uk/Article.aspx?id=201206260700211160G
Commenting on the Company's performance Group Chief Executive, David Dutro, said: "Trading for the first three months of the year is ahead of the same period last year reflecting excellent progress in a number of key markets, which more than offset an anticipated general slowdown in Europe. The trend of robust margins, in combination with a solid order book, has continued and we expect full year earnings to be in line with market expectations."