1st Aug 2014 08:42
LONDON (Alliance News) - Molten metal flow engineering company Vesuvius PLC Friday expressed confidence in meeting its full year expectations, as lower costs helped boost profit in the half year to end-June, despite sterling's strength hitting revenue.
Vesuvius proposed an interim dividend of 5.0 pence per share, up from 4.75 pence in the previous year.
The company proposed a pretax profit of GBP54.9 million for the six months to end-June, slightly up from GBP51.7 million a year earlier, despite seeing revenue decline to GBP729.8 million, from GBP772.7 million. Costs were down, and in the previous year it posted restructuring charges and a GBP8.8 million amortisation bill.
Vesuvius attributed its fall in revenue to the strength of sterling, the sale of its German brick business in March, and its Canadian construction business in July 2013.
In its Steel Division revenue was down 4.7%, although at constant currency and excluding acquisitions, disposals and exceptional costs, it rose 6.0%. The company saw strong performances from its Steel Flow Control and Advanced Refractories.
In Steel Flow Control revenue was driven by growth in Europe, the Middle East and Africa, Asia, and the US, despite sluggish growth in steel production volumes in North America and declining steel production in South America.
Advanced Refractories revenue was driven by strong performances in North America, where the company introduced new product ranges, and Asia, as it re-commenced some customer facilities in the region. This helped to offset a decline in Europe, the Middle East and Africa, hit by lower revenues in Russia and Ukraine.
In its Foundry Division, revenue was down 7.3%, although up 2.0% on an underlying basis. Vesuvius performed well in Europe, the Middle East and Africa, but saw a weaker performance in its Asian business due to lower levels of mining activity in Indonesia and Australia. Additionally, its South America performance was hit by weaker automotive production volumes in Brazil.
Vesuvius expects to see the underlying trading environment in the second half broadly similar to the first, although it cautioned that if the sterling remains strong it will hit its results for the full year.
Shares in Vesuvius were trading down 0.5% at 462.80 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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