Revenue and earnings surge at Vesuvius

Vesuvius posted a 24.4% rise in first-half revenue on Thursday to £831.5m, with underlying revenue growth of 9.6%, and a 46% improvement in trading profit to £86.3m, or a 26.7% underlying change.

The FTSE 250 molten metal flow engineering company said its return on sales was 10.4%, a 160 basis point improvement from the first half of 2016, or 140 basis points on an underlying basis.

Operating profit was ahead 45.6% at £67.7mm, and profit before tax rose 59.2% to £60.8m, while profit showed improvement of 66.9% at £46.4m.

"We had a strong first half, delivering our best half-year revenue, trading profit and return on sales since demerger on a reported basis,” said chief executive François Wanecq.

Vesuvius’ headline earnings were 54.9% higher year-on-year at £53.3, with headline earnings per share up 53.9% at 19.7p.

Statutory earnings per share surged 65.9% to 15.1p.

The company’s operating cash flow was 2.4% higher at £67.4m, while net debt widened marginally, by 3.7%, to £321.8m.

“We also further demonstrated our ability to outperform underlying markets and I was especially pleased at our progress in recovering market position in the US,” François Wanecq added.

“I am also happy to announce that we have identified a further £15m per annum of restructuring savings, which we expect to realise over the next three years.”

Vesuvius’ board confirmed a dividend of 5.5p for the period, an improvement of 6.8% from the 5.15p paid for the first half of 2016.

“Whilst the trading environment in H1 was strong, we are cautious about H2 as global steel production is slowing and the second half is seasonally weaker in Foundry,” Wanecq added.

“Despite some short-term headwinds, we remain confident in our ability to improve trading margins in 2018.”