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The chemicals business is confident of operating profit growth in 2017
Thursday 27 Apr 2017 Author: Lisa-Marie Janes

Elementis (ELM) 312.7p

Gain to date: 33%

Original entry point: Buy at 234.5p, 10 November 2016

Broker N+1 Singer has upgraded Elementis’ (ELM) 2017 profit and earnings per share forecast by 5% as the $360m acquisition of SummitReheis has completed three months earlier than expected.

Analyst James Tetley is confident the company will return to earnings growth after a slump in profits and earnings last year as the strong dollar and low oil prices dragged on performance.

He believes there is scope for outperformance in the share price once the SummitReheis acquisition is integrated.

ELEMENTIS - Comparison Line Chart (Rebased to first) 27 April

Elementis said in February that it expected the acquisition to boost earnings in the current financial year which ends on 31 December 2017.

The chemical firm said on 25 April that the new calendar year had started well.

Its largest divisions, Specialty Products and Chromium, have bounced back thanks to strong growth in its personal care and energy businesses, as well as more demand outside North America.

Its chemical solution Surfactants division benefited from favourable pricing conditions.

Keep buying at 314.2p. (LMJ)

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