Market conditions remained mixed for molten metal-flow engineer Vesuvius (VSVS) in the first half of the year. But the company still managed a respectable performance, thanks to its steel division. This makes two things: first, the pipes and valves that control molten steel as it flows through the mills; second the linings that protect the vessels containing the steel.
Revenue here grew 6 per cent to £490m at constant exchange rates, despite growth of just 2.5 per cent in world steel production. Return on sales also improved by 131 basis points, as new system installations in China, Korea and the US were ramped up. Top-line growth and better margins combined to push trading profit up 23 per cent to £47.2m.
But it was a different story in the foundry division, Foseco, which accounted for one third of group revenue. Divisional sales ticked up by just 2 per cent, with trading profit broadly flat. Management says there has been no improvement in Vesuvius's end-markets, which include heavy trucks, light vehicles, mining equipment and power generation.
That left revenue across the group 5 per cent higher at £730m, and trading profit 14 per cent higher at £71.2m. But this figure excludes a significant currency hit and two business disposals. Numis Securities expects EPS of 33p for the full year, virtually flat on 2013.
| VESUVIUS (VSVS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 465p | MARKET VALUE: | £1.3bn | |
| TOUCH: | 464-466p | 12-MONTH HIGH: | 523p | LOW: 410p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 304p* | NET DEBT: | 31% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 773 | 51.7 | 12.4 | 4.75 |
| 2014 | 730 | 54.9 | 14.2 | 5 |
| % change | -6 | +6 | +15 | +5 |
Ex-div: 13 Aug Payment: 26 Sep *Includes intangible asset of £695m, or 256p a share | ||||
