Vesuvius explodes higher

Trading margin was down 50 basis points at 9.2 per cent, but this was 210 basis points higher than in the second half of 2012. Exiting less lucrative steel business and shutting the loss-making solar crucibles operation delivered much of the benefit, and deciding to shed its Canadian construction and installation business will help a drive margins toward the 2008 peak of 12 per cent. Still, operating profit before restructuring charges and a £4m reduction in borrowing costs fell 11 per cent to £70.8m. A sharp drop in truck and car production, especially in Europe, hit the foundry division where operating profit fell 20 per cent to £28m. Profits slumped by 16 per cent at the steel division to £43m which mainly reflected asset sales. Much, then, will depend on the big European customers who return to work after the summer shut-downs. We’ll get the numbers in October, although chief executive François Wanecq does not expect much sequential benefit from the market.

Broker Numis Securities expects full-year adjusted pre-tax profit of £114.5m and EPS of 29.3p (from £110.9m and 27.5p in 2012).