Vesuvius investors gather as headwinds continue

As investors gathered in London for the Vesuvius annual meeting on Thursday, the company did its best to assure them that it was still solid despite some serious market headwinds.

The FTSE 250 firm said overall market conditions were still suffering from lower global steel production and mixed end-markets in its foundry division.

Vesuvius said market conditions in the global foundry industry were still mixed, with quarterly declines in mining, agriculture and construction markets in the US, Brazil, Australia and South East Asia being contrasted by light vehicle production and truck output picking up in Europe.

It said it was continuing to make good progress with its self-help and restructuring actions as evidenced by its April decision to close the Flow Control plant in Ostrawa, Czech Republic.

In steel, it highlighted data from the World Steel Association that global production was 3.6% lower on-year in the first quarter of 2016, though it was 0.1% higher in the fourth quarter of 2015.

Vesuvius expected to see benefits of £20m per annum from the restructuring by the end of 2017.

“We expect the underlying trading environment for the balance of the year to remain similar to that experienced in the second half of 2015, and our trading performance to be in line with current full year expectations,” the board said in a statement.