Sector spotlight: chemicals

The chemicals sector in the UK is a small specialist area but does have a handful of large companies. Let’s take a look and see if any attractive companies for investors lurk in the chemicals sector.

Article updated: 15 July 2020 12:00pm Author: Michael Baxter

The chemicals sector in the UK is a small specialist area but does that a handful of large companies. Let’s take a look and see if any attractive companies for investors lurk in the chemicals sector.

Advance Energy

Advance Energy is an international upstream oil & gas company with assets in UK and Indonesia.

Share price has fallen steadily over long-term. 

Share price 2020 high All time high P/E Market cap Yield 
0.17p 0.18p 6,000p (2000) -0.22 £2.9m 0%

Applied Graphene Materials

Applied Graphene Materials works in partnership with its customers using its knowledge and expertise to provide custom graphene dispersions and formats to deliver enhancements and benefits for a wide range of applications. Founded in 2010.

There has been a decline in share price since 2014 which is a cause for concern, and the company is still loss making, but the balance sheet looks quite strong and graphene is a material that could change the world. 

Share price 2020 high All time high P/E Market cap Yield
23p 23p 444p (2014) -2.91 £11m 0% 

Byotrol

This company develops and commercialises market-leading, antimicrobial technologies and products, including hand sanitisers which it has been promoting hard during Covid crisis. 

Byotrol's revenue trebled in last year and made a small net profit in its latest year compared to loss the year before.

Share price 2020 high All time high P/E Market cap Yield
5.88p 6.98p 67p (2007) 119.50 £26m 0% 

Carclo

Carclo is a global supplier of technical plastics. Products are supplied to customers in diverse markets such as medical, electronics, optics and control cables for aerospace.

Revenue has increased by around a third over the last five years but the company made a big loss last year, underling operating profit lowest level in five years last year.

Share price 2020 high All time high P/E Market cap Yield
10.05p 14.88p 468p (2012) -4 £7.4m 0% 

Croda

High performance ingredients and technologies in some of the biggest, most successful brands in the world. The business is split into three core market sectors: Personal Care; Life Sciences made up of Crop Care and Health Care and Performance Technologies made up of Coatings and Polymers; Geo Technologies; Home Care; Lubricants and Polymer Additives.

Health and Well-Being and Personal Care are two strong growth areas. Croda has a healthy balance sheet, good product and global diversification, but P/E ratio does look on the high side.

Share price 2020 high All time high P/E Market cap Yield 
5,354p 5,354p 5,354p 30.8 £6.9bn .68% 

ECO Animal Health

Eco Animal Health develop, register and market pharmaceutical products for global animal health markets. Products for these growth markets promote well-being in animals.

The companies sales, EBITDA and profits are down on the year before but could benefit from the growing appetite among consumers for eco friendly products.

Share price 2020 high All time high P/E Market cap Yield 
244p 268p 670p 14.2 £169m 6.02% 

Elementis

Elementis produce performance-driven additives that help create innovative formulations for consumer and industrial applications. In practice, this means: personal care products; solutions for waterborne, solventborne and solvent-free coatings systems; producer of chromium chemicals; and a variety of organically modified bentonite and hectorite clays as well as polymer based additives that are used in drilling, simulation and cementing applications.

Revenue increased by a third over last five years, pre-tax profits fell. Total net debt for the Group (excluding lease liabilities) was $454m at 31 December 2019, representing a ratio of 2.7x EBITDA.

Share price 2020 high All time high P/E Market cap Yield 
64p 184p 280p (2015 and 2018) 10.5 £373m 3.44% 

Hardide

Hardide is a global innovator and provider of advanced tungsten carbide/tungsten metal matrix composite coatings. It’s coatings significantly increase the life of critical metal parts operating in abrasive, erosive, corrosive and chemically aggressive environments. Its range of nanostructured coatings can be applied to a wide range of metallic substrates including stainless steels, superalloys, tool and carbon steels as well as nickel, copper and cobalt-based alloys, and are a recognised replacement for hard chrome and cadmium plating, ceramics and HVOF tungsten carbides.

Revenue in latest half-year hit a record high, up 29%. Gross profit increased 58%. Raised £2.5 million and had £4.88 million in cash at end of March.

Share price 2020 high All time high P/E Market cap Yield 
37.5p 66p 610p (2006) -16 3£20m 0% 

Inspiration Healthcare

A global supplier of medical technology for critical care, operating theatre and home healthcare applications. Its solutions span non-invasive respiratory management, thermoregulation and patient warming for newborns through to adults in intensive care and the operating theatre, whilst our distribution business in the UK and Ireland supplies solutions to support specialised surgical procedures and infusion therapies.

Inspiration Healthcare recently raised £17 million and in last year revenue increased 15%. Operating profit  is aslo up 24%.

Share price 2020 high All time high P/E Market cap Yield 
63.5p 75p 1,860p (2002) 28.57 £42m 0% 

Johnson Matthey

A global leader in sustainable technologies operating through their Clean Air, Efficient Natural Resources, Health, New Markets and Corporate segments with approximately 93% of revenue stemming from Clean Air, which focuses on catalyst systems to reduce emissions from vehicles and industry, whilst Efficient Natural Resources aims to create value from the transformation of natural resources including oil, gas and platinum group metals.

The companies revenue is up by about a third over last five years but pre-tax profits fell over the same period. Disappointing performance over five-years considering what a respected and established company Johnson Matthey is. 

Share price 2020 high All time high P/E Market cap Yield 
2,066p 3,032p 3,762p (2018) 15.69 £4bn 2.7% 

Plant Health Care

Plant Health Care is a provider of proprietary biological products to global agriculture markets. It is developing technologies that protect crops from diseases and environmental stresses, leading to increased crop yield and quality.

Revenue has fallen over the last five years, but losses halved.

Share price 2020 high All time high P/E Market cap Yield 
9.95p 15p 409p (2008) -6 £23m 0% 

Porvair

The companies filtration systems are sold worldwide with many unique solutions for various industries and custom engineered solutions.

Porvair shares have increased by close to 10-fold since 2010. Both revenue and pre-tax profits up around 40% over last five years.

Share price 2020 high All time high P/E Market cap Yield 
 582p 786p 786p 24.58 £267m 0.87%

Scapa

Scapa partners with market leaders to design, develop and manufacture innovative medical device fixation and topical solutions to improve people’s lives.

Revenue up roughly 20% over five years, but five years ago it was profitable now loss making. Profits projected to rise to the level seen in 2018 in the year after next.

Share price 2020 high All time high P/E Market cap Yield 
93p 282p 500p (2017) -2.98 £177m 3.09% 

Synthomer

Synthomer is a specialist chemical group with interests throughout the world, from the Far East to Europe. The company exports products to more than 100 countries and holds a world leading position in polymer technology.

Revenue increased 67% over last five years and pre-tax profits are up by a third. It is raising €520 million of debt.

Share price 2020 high All time high P/E Market cap Yield 
281p 365p 517p (2018) 13.06 £1.2billion 1.43% 

Victrex

Victrex is a world leader in PEEK and PAEK-based polymer solutions, helping manufacturers overcome complex design and engineering challenges. Its polymers are found in 4 billion mobile phones; approximately 9 million implanted medical devices; and 500 million automotive applications.

Revenue is up around 10% over last five years, pre-tax profits flat, but it recently warned it expected margins to fall.

Share price 2020 high All time high P/E Market cap Yield 
1,866p 2,540p 3,200p (2018) 17.47 £1.6bn 3.20%

Velocys

Velocys enables sustainable fuels for aviation and heavy goods transport, using waste materials, to cut greenhouse gas emissions and improve air quality. Its reactor allows the production of advanced biofuels from large, sustainable carbon sources such as household waste and forest residues.

Revenue declined and losses widened over last five years.

Share price 2020 high All time high P/E Market cap Yield 
6.90p 14p 180p (2014) -0.83 £41m 0% 

Zotefoams

Operates in cellular materials technology. Zotefoams is the world’s largest manufacturer of lightweight crosslinked polyolefin block foams and additionally sells and licenses high-performance products and microcellular materials technology.

Revenue increased by 50% over last five years and profits increased by a third.

Share price 2020 high All time high P/E Market cap Yield 
 353p 445p 660p (2019) 20.6 £173m 0.57%

These views are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees.

Michael Baxter portrait photo
Michael Baxter

Economics Commentator

Michael is an economics, investment and technology writer, known for his entertaining style. He has previously been a full-time investor, founder of a technology company which was floated on the NASDAQ, and a director of a PR company specialising in IT.

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