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Elementis Share Discussion Threads
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|Singer on today`s news...
This materially enhances the Group’s offering in personal care (now 30% of Group operating profit on a pro-forma basis) and prompts double digit earnings upgrades to FY18, the first full year post acquisition.
The acquisition will enhance the EBITDA margin as well as earnings, reflecting the high quality of the business acquired. The multiple looks undemanding at 11.8x FY16 EV/EBITDA for a specialties business that adds scale to one of Elementis’ most attractive niches.
It is an acquisition on a much larger scale than recent bolt-ons, confirmation of the Group’s growth ambitions under the new management team. Underlying trading is said to be in line and the special dividend will be paid for FY16, as expected.
We upgrade our forecasts for the acquisition here. Our first take is an EPS upgrade of 7% to FY17 assuming a half year contribution and c.15% to FY18. The special dividend drops out mechanistically from FY17. Elementis remains one of our Best Ideas for 2017.
|Some ones nibbling there may be a take over a some point in TIME.|
|Big surge today. Holdings in company news items, and a trading update ... anyone aware of any news otherwise?
"Cash generation continues to be an important component of the Group's
performance and, as previously stated, the net cash balance at the end of the
year is likely to be higher than at the same time last year which, under our
progressive dividend policy, will have a positive effect on the special
How special a dividend might it be? Enough to fire them up further I hope :)|
|New lower low (although might be double bottom) - if the crash comes 160 looks likely and a retest of 190 would make that an entry point|
|Probably a lot to do with the oil side of the business. With drills being closed down, others cancelled and oil companies holding back future planned drills. This contributed a good part on turnover in the past. IMO
|Surprising lack of interest in this stock. Can anybody tell me why.|
|Pre-close not that bad. Slight over reaction to the negative I think.|
|Goldman pushing the chemical sector today - see also Croda.|
|Chemical specialist Elementis said full-year earnings should be in line with expectations despite a sales slowdown.
In a trading statement, Elementis said positive first half trends were expected to continue, "despite challenging conditions" in the Chinese and US oilfield sectors.
However, it added that third quarter sales at the speciality chemical division were down 7% on a constant currency basis and 20% on a reported basis. Chromium sales were down 21% year-on-year but in line with expectations.
The company said it would still be in a position to reward shareholders with "attractive returns" through its progressive dividend policy.
Chief executive David Dutro said market share and margin contributions at the company's speciality products unit had gone up. He added that chromium margins had remained remained "relatively stable" since the end of June.
"This resilient margin performance is a clear indication that our customer value proposition remains in place and that the impact on demand is arising from the current macro-economic factors. Consequently, we expect positive performance to resume as end market demand returns," he said.
"In the meantime, we are taking measured action to reduce our cost base to a level that is more consistent with current activity levels and most of the benefit from this will be seen in 2016."
Dutro said innovation remained a "key factor" in the firm's performance and it would continue to make investments in the future growth of the business.
"These will include in decorative coatings, a further expansion of the New Martinsville facility, and in Asia Pacific, new investments in the water based dispersants arena, as well as in support of our IP protected, high value, castor wax based products," he said|
|Hopefully this should settle the nerves.|
|Should steady the ship.|
|ELEMENTIS – Shares in the specialty chemicals firm gain 1 per cent, or 2.8p at 240.7p as Swiss broker UBS upgrades its rating to buy from neutral|
|The beauty of reading charts is that there is always an alternative - ie the trend line held and so the price bounced off it!
I didn't have the guts to buy at 210 but if it revisits for a triple bottom then I will!|
|The future is a foreign country. They do things differently there.
|It seems you were wrong here -now back over 240p...|
|Bang on trend line from mid-2012 - if it doesn't hold it looks like 190 is the next support.|
|In October takeover rumours as the cyclical nature of the chrome business had been ameliorated.
February the additive business had grown 9% "due to the new management team" despite the O&G slowdown.
Jun additives down 30% and currency problems affecting turnover in South America.
Strong balance sheet.
Not going to add until the dust has settled.
Not going to sell.
Boring locked in monies.
|Profit warnings don't normally come in ones, US drilling is still slowing and I expect it will for the rest of this year. How much of this is priced in is probably just down to sentiment now.|
|results due 20th July so may get further fall then as people forget news is already discounted . Holding as no chance to sell this morning and long term still looks good. Same thing happened to Weir for same reason (weak demand from US drillers). Forecast was predicting a 30% drop in EPS before this news so goodness knows where it will end up. Have held from 62p six years ago so will continue to hold for divi.|
|If the wider stock market holds steady, I'd expect to see this to recover at least some of what appears to be too big a price drop fairly soon. But IMO, that's a bit of an 'if' at the moment. So, for what its worth, I'll hang on to my current small holding in ELM but not add any more for now. Probably too conservative on both counts!|
|Profit warning on the lack of US drilling, probably best to wait for that to steady off.|
|Was wondering whether to pick some up. High quality company-very strong cash generation. not sure.|
|Well and truly smacked today 250 looks like an entry point - but that gap could take a time to close|