Vesuvius (VSVS) attributed the 4.9 per cent decline in its revenue to a collapse in its two main end markets, steel and foundry. But the molten metal engineer managed to limit its profit decline through an acceleration of its restructuring programme, which yielded £16.4m in recurring savings. Vesuvius shut eight plants in 2019 without cutting its overall production capacity, although some delays in foundry and advanced restructuring projects will see £1.2m in benefits recovered in 2020 instead.
The outlook for 2020 is mixed. There are signs that the customer destocking witnessed through 2019 is coming to an end. But Vesuvius’s markets proved especially weak towards the close of last year and the company expects these conditions to persist at least through its first quarter this year. “The potential impact of the Covid-19 health crisis is difficult to assess at this time,” chief executive Patrick André added, “but is likely to have a temporary negative impact on our end markets.”
Bloomberg consensus forecasts are for adjusted earnings per share of 42.3p for 2020, rising to 45.6p in 2021.
| VESUVIUS (VSVS) | ||||
| ORD PRICE: | 407p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 406-407p | 12-MONTH HIGH: | 646p | LOW: 331p |
| DIVIDEND YIELD: | 5% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 392p* | NET DEBT: | 19% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 1.32 | 77.4 | 17.6 | 16.3 |
| 2016 | 1.40 | 79.4 | 17.3 | 16.6 |
| 2017 | 1.68 | 97.1 | 13.4 | 18.0 |
| 2018 | 1.80 | 156 | 51.1 | 19.8 |
| 2019 | 1.71 | 119 | 29.8 | 20.5 |
| % change | -5 | -24 | -42 | +4 |
| Ex-div: | 16 Apr | |||
| Payment: | 22 May | |||
| *Includes intangible assets of £709m, or 261p a share | ||||
