4th Mar 2014 11:14
LONDON (Alliance News) - Vesuvius PLC reported higher profits for 2013, its first full year as a separate company, as it cut manufacturing costs and disposed of less-profitable businesses, and said it expects to further improve its margins in 2014 as it continues to improve operational efficiency in the face of still-challenging markets.
The company, which demerged from Cookson PLC in December 2012, reported a pretax profit of GBP104.1 million for 2013, up from GBP17.2 million in 29012 when it booked GBP57 million of restructuring costs and GBP15.7 million of demerged costs.
Excluding those costs, pretax profit rose to GBP125.2 million, from GBP109.7 million, as cost cutting offset a decline in revenues to GBP1.51 billion, from GBP1.55 billion.
"In our first complete year as an independent company, we have successfully initiated the recovery of margins across the group despite an unfavourable economic environment. Market conditions remained challenging in 2013, continuing from the reduced levels of activity seen in the second half of 2012, and Sterling strengthened substantially in the second half of 2013, impacting our reported growth numbers," Chief Executive Francois Wanecq said in a statement.
During the year, Vesuvius sold its precious metals processing division and exited other low-margin businesses that it decided weren't a part of its future.
However, the company, which makes products and technology used by the steel and foundry casting industries, expects its markets to remain challenging in 2014 and hence it is again relying on operational improvements to boost its performance. It is also facing a further hit from the recent strength of sterling.
"We expect the underlying trading environment during 2014 to be broadly similar to that experienced in 2013. We are progressing with our plan to improve operational efficiency across the group. These actions should continue to drive improvement in our trading margins and working capital performance in 2014. If the recent strength of Sterling continues it will have a negative impact on our reported growth in 2014.
The company will pay a final dividend of 10.25 pence for 2013, bringing its total dividend for the year to 15.00p. That is a 5.3% increase on its share of the Cookson Group dividend in 2012.
Vesuvius shares were up 4.7% at 462.80 pence Tuesday morning, one of the top gainers on the FTSE 250.
By Steve McGrath; [email protected]; @stevemcgrath1
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