31st Jul 2015 07:19
LONDON (Alliance News) - Molten metal flow engineering company Vesuvius PLC on Friday said its pretax profit fell in the first half of 2015 due to a fall in global steel production and inventory volumes which pulled down its revenue in the half.
The group said its pretax profit in the first half fell to GBP37.9 million, down from GBP40.4 million a year earlier, as the decline in global steel production pulled down revenue to GBP702.6 million from GBP729.8 million a year earlier.
Vesuvius said the revenue decline had been partially offset by an improvement in its return on sales to 10%, thanks to actions taken by the company to improve productivity and to cut costs, while the underlying profitability in its foundry division improved thanks to cost-cutting measures.
The group said it will pay an interim dividend of 5.15 pence per share, up 3% from the 5 pence it paid a year earlier.
Vesuvius also said it has kicked off a restructuring programme in order to address the structural changes occurring in its end markets. The programme will result in the company booking a charge of around GBP20 million in 2015 and 2016, with cost savings of GBP10 million a year expected from 2017 onwards. Some benefits from the restructuring have already been seen and the group expects to meet market forecasts for the full year.
"In recent months, we have seen challenging end markets with a global decline in crude steel production, particularly in the US, our largest market. Against this backdrop, Vesuvius has made further strategic and operational progress," said Chief Executive François Wanecq.
Shares in Vesuvius were up 2% to 429.00 pence on Friday morning, one of the best performers in the FTSE 250 in early trade.
By Sam Unsted; [email protected]; @SamUAtAlliance
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