Vesuvius (VSVS) wasn’t kidding when it told investors back in May that business was booming. The molten metal flow engineer registered its best half-year performance since becoming an independent company in 2012. Investors responded to another strengthening performance, and equally encouraging outlook statement, by sending the shares up 8 per cent on early trading.
Management credited a 20 per cent rise in adjusted profit at constant currencies to a healthy combination of improved trading conditions and its own self-help measures. A 4.3 per cent uptick in global steel production during the first five months of the year, coupled with strong demand for heavy trucks, mining, construction and agricultural equipment, provided an encouraging backdrop that the group took further advantage of by increasing sales penetration, focusing on certain customers, launching new products and hiking prices to offset raw material and other cost inflation.
Vesuvius also made good on its ongoing pledge to settle debts with its suppliers quicker. The group’s working capital turnover ratio tightened a further 0.8 percentage points to 24.1 per cent over the past six months. And rather than rest on its laurels, the engineer continues to explore new ways to drive efficiencies. Management outlined fresh plans to deliver total savings of £22m per year, representing a £7m increase on its previous target.
Numis expects adjusted profits of £187m for the December year-end, leading to EPS of 47.1p, against £153m and 40.7p in 2017.
| VESUVIUS (VSVS) | ||||
| ORD PRICE: | 629p | MARKET VALUE: | £1.71bn | |
| TOUCH: | 628-630p | 12-MONTH HIGH: | 657p | LOW: 515p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 384p* | NET DEBT: | 26% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 832 | 60.8 | 15.1 | 5.5 |
| 2018 | 897 | 87.8 | 24.2 | 6.0 |
| % change | +8 | +44 | +60 | +9 |
| Ex-div: | 09 Aug | |||
| Payment: | 21 Sep | |||
| *Includes intangible assets of £730m, or 269p a share | ||||
