Elementis posts statutory loss after disposal of talc business

5th Mar 2026 10:34

(Sharecast News) - Elementis reported a statutory loss for 2025 on Thursday after the disposal of its talc business weighed on earnings, though the specialty chemicals group said profitability and margins improved as it advanced its new growth strategy.

The FTSE 250 company posted a statutory loss of $45.5m for the year ended 31 December, reflecting a $110.5m loss linked to the sale of its talc operations in the first half.

Excluding exceptional items, adjusted operating profit rose to $126.7m from $119.2m a year earlier, with the adjusted operating margin increasing 150 basis points to 21.2%.

Revenue was broadly stable at $597.5m, down 1.0% from $603.8m in 2024, as growth in the personal care segment partly offset weaker coatings demand.

Chief executive Luc van Ravenstein said the group had delivered solid profitability despite difficult market conditions.

"I am pleased we have delivered a resilient performance with strong growth in profitability and margins despite the challenging market environment."

The personal care division reported revenue of $224.5m, up 3.3% year-on-year, or 2.4% on a constant currency basis, supported by higher volumes and pricing.

Adjusted operating profit in the segment rose 18.2% to $72.8m, lifting the operating margin to 32.4%.

By contrast, coatings revenue fell 3.5% to $373.0m, or 4.3% on a constant currency basis, reflecting softer demand across regions.

Adjusted operating profit declined 10.2% to $70.4m, although the division maintained a resilient margin of 18.9%, supported by pricing actions and strong performance from the energy business.

Group operating profit on a statutory basis increased 13.5% to $109.0m, while profit before tax rose 21.0% to $89.9m.

Adjusted profit before tax was $107.5m, up from $96.7m a year earlier, while adjusted diluted earnings per share increased to 13.7 cents from 12.0 cents.

Elementis said it had made progress executing its 'Elevate Elementis' strategy following the disposal of the talc business, transforming the company into a pure-play specialty chemicals group.

The strategy includes innovation-led growth, operational improvements and targeted acquisitions.

During the year the company acquired Alchemy for $22m to expand its presence in the natural skincare and cosmetics market, while innovation revenue rose by 200 basis points to 16.4%.

Operational improvements included debottlenecking work at its St Louis facility in the United States, increasing capacity utilisation by around 20% since the first half.

The group also delivered $18m of cost savings in 2025 and said it remains on track to deliver a further $4m in 2026 as part of a broader efficiency programme.

Separately, Elementis announced it had agreed to sell its pharmaceutical manufacturing business, which produces antacids and excipients, to Associated British Foods.

Completion of the transaction was expected in the second quarter of 2026, subject to regulatory approvals, with the company indicating that the net cash proceeds were expected to be returned to shareholders.

Van Ravenstein said the disposal would sharpen the company's strategic focus.

"The transaction sharpens our focus on our core markets, will reduce the group's capital intensity and will enhance our operating margins.

"Following closing, we expect to return the net cash proceeds to shareholders."

Net debt increased to $185.4m from $157m a year earlier, with the net debt to EBITDA ratio rising to 1.3 times from 1.1 times.

The board proposed a final dividend of 3.0 cents per share, bringing the full-year payout to 4.3 cents per share, up 7.5% from 4.0 cents in 2024. The group also completed a £40m ($53.8m) share buyback during the year.

Looking ahead, Elementis said it remained cautious about the demand outlook for coatings and broader geopolitical uncertainty but expected to deliver further progress in 2026.

Van Ravenstein said the company's streamlined structure and strategy positioned it well for growth.

"As a focused premium specialty chemicals business with a clear strategy and good operational momentum, we are well positioned to capitalise on the opportunities in large, attractive personal care, coatings and new adjacent markets to create long-term value for our shareholders."

At 1122 GMT, shares in Elementis were up 0.25% at 161.4p.

Reporting by Josh White for Sharecast.com.