Vesuvius (VSVS) chief executive François Wanecq described his company's half-year results as "encouraging", while admitting that global steel and foundry markets - although stabilising - remain weak. But while headline numbers showed a marked decline in trading profit and return on sales against the first six months of 2015, the metal flow engineering specialist appears to be turning a corner compared with the latter half of last year. Revenue and trading profit were both in advance of those secured in the second half of 2015.
The higher-value mix of metal and ceramic products Vesuvius manufactures already provides some insulation against the continued pain in its main steel market, but the company is also keen to get the most out of self-help measures. Vesuvius now believes it can get even more out of its restructuring programme, and expects annual cost savings of £25m by the end of next year, at a total cost of £35m. Progress on this front was demonstrated by the £7.1m in savings achieved at the half-year mark, measured against the comparable period.
Prior to these results, Panmure Gordon - which believes steel markets are heading for another crash - said it expects £90m in adjusted pre-tax profit and EPS of 23.2p in the year to December, down from £109m and 28p.
VESUVIUS (VSVS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 355p | MARKET VALUE: | £962m | |
| TOUCH: | 354-355p | 12-MONTH HIGH: | 429p | LOW: 265p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 360p* | NET DEBT: | 31% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 703 | 51.4 | 13.0 | 5.15 |
| 2016 | 668 | 38.2 | 9.1 | 5.15 |
| % change | -5 | -26 | -30 | - |
Ex-div: 11 Aug Payment: 23 Sep *Includes intangible assets of £755m, or 279p a share. | ||||
