James Curran, Director of Investor Relations, M&A and Strategy at Elementis, gave a very information presentation to ShareSoc in a webinar organised by Yellowstone Advisory.
The company operates in a number of attractive speciality chemical market segments where it tends to have leading market positions. These market segments are characterised by good underlying growth and attractive returns. The company has made significant investment in innovation to maintain their sector leading positions and brought a number of new products to market.
It was encouraging to hear the potential for further margin improvement from operational leverage, further efficiencies and improvements in the supply chain. None of this will happen overnight but a 300bp improvement was highlighted as a medium term target.
The company generates good levels of cash and has a disciplined approach to capital allocation looking for IRR’s in excess of 20% for capital investments. There is a progressive dividend policy and a commitment to reduce financial leverage in the medium term.
All in all a very comprehensive introduction to the company . A recording of the presentation can be found on the Yellowstone Advisory YouTube channel.