Elementis PLC on Tuesday reported a drop in interim profit despite revenue growth, but said its annual performance will be at the top end of consensus expectations.

Shares were up 6.6% at 116.70 pence each on Tuesday morning in London.

For the six months that ended on June 30, the London-based speciality chemicals said revenue rose by 6.0% to $478.3 million from $452.1 million a year earlier, driven by ‘successful pricing actions as well as improved mix more than offsetting cost inflation linked to global supply chain challenges,’ the company explained.

Pretax profit, however, decreased by 20% to $27.6 million from $34.5 million a year earlier, as administrative expenses rose by 53% to $75.6 million from $49.3 million.

Elementis reported a record Coatings performance linked to demand recovery and encouraging strategic momentum. Revenue increased by 9% on an underlying basis to $209 million from $197 million a year earlier.

Chief Executive Officer Paul Waterman said: ‘We have made a strong start to the year, benefiting from the combination of focused strategy execution and proactive price management. Whilst we are mindful of the continued macroeconomic risks, the group has demonstrated the attractiveness of its business model and is well positioned to manage these impacts.’

Elementis did not declare an interim dividend for 2022, in line with the year before, as a result of its ‘financial leverage and the continued macroeconomic uncertainty,’ it explained. ‘The board will keep future dividends under review and will restart payments as soon as it is appropriate to do so,’ it said.

Looking ahead, Elementis said its financial performance is expected to be towards the top end of consensus expectations. It anticipates a steady demand environment for the remainder of the year and a further reduction in leverage.

Copyright 2022 Alliance News Limited. All Rights Reserved.