Elementis PLC on Thursday remained confident in its prospects for the year as a whole, after seeing pretax profit rise but revenue decline on a weak demand environment.
For the six months ended June 30, the London-based speciality chemicals company reported revenue of $363.8 million, down 6.1% from $387.4 million a year prior.
Excluding the impact of currency, group revenue declined by 4.4%, driven primarily by weak market demand and customer destocking in Coatings, but partially offset by strong sales in the Personal Care segment.
Pretax profit increased to £34.9 million from £23.2 million the previous year.
Meanwhile, adjusted operating profit was $52.5 million, down 9.8% from $58.2 million in the same period last year. Elementis said this was primarily due to movements in adjusting items, partially offset by underlying cost inflation.
In the first half of the year, $8.7 million of charges to operating profit were classified as adjusting items, compared to $30.9 million a year prior.
Net finance costs, however, increased to $8.4 million from $3.5 million.
Basic earnings per share from both continuing and discontinued operations were 4.7 cents, up from 3.6c the previous year. Diluted earnings per share were 4.6c, up from 3.5c.
Looking ahead, Elementis said that its full year outlook remains unchanged. The group said it expects to deliver an improved financial performance and reduction in leverage, in line with expectations.
‘The group has performed well in a weak demand environment, reflecting the strength of its business model and the benefits of proactive self-help actions,’ said Chief Executive Officer Paul Waterman.
He added: ‘Whilst we are mindful of continued macro-economic risks, the group is well positioned to manage these impacts and deliver against full year expectations.’
However, Elementis said that ‘given the macroeconomic uncertainty’, it would not be declaring an interim dividend for 2023.
The board told investors that it would ‘keep future dividends under review and will restart payments as soon as it is appropriate to do so’.
Elementis shares were trading 6.8% higher at 115.93 pence each in London on Thursday morning.
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