Elementis looks to cut debt following Mondo deal; full-year revenues jump

5th Mar 2019 10:41

(Sharecast News) - Speciality chemicals firm Elementis posted a jump in annual revenues on Tuesday, but conceded that market conditions remained challenging.The company, which derives 96% of sales from outside the UK, said revenues had grown 5% in the year to 31 December to $822m, while adjusted pre-tax profits rose 3% to $113m.Elementis said that there had been good levels of growth in America during the period but there had been "some deterioration in Europe and Asia".Net debt ballooned 71% to $498m following the acquisition of Amsterdam-based Mondo Minerals.Elementis said it would now look to "rapidly deleverage" through a mixture of organic cash generation and "self-help initiatives".Chief executive Paul Waterman added: "Elementis delivered good overall results in a challenging operating environment. The acquisition of Mondo is a major stop to further improve the quality of our portfolio. Elementis today is increasingly focused on three highly profitable businesses of scale in personal care, coatings and talc."In 2019, while global market conditions remain challenging, particularly in coatings, we will seek to capture synergies as we integrate Mondo, transform coatings and grow personal care. This will reduce leverage via the group's inherently strong cash generation."The company added that it was prepared to handle a potential no-deal Brexit, pointing out that just one of its 21 manufacturing sites were in the UK."We recognise that there may be short term disruption to logistics," it continued. "However, steps have been taken to pro-actively manage our supply chain to mitigate any potential impact. This includes ensuring sufficient raw materials are held at our production site in Livingston, Scotland, as well has having sufficient finished good throughout our global distribution network."As at 1030 GMT, shares in Elementis were off 1% at 176p.