Vesuvius revenue and earnings slide year-on-year

Vesuvius posted its half-year results for the six months to 30 June on Friday, with revenue, profit and return on sales in line with expectations.

The FTSE 250 firm said the global steel and foundry markets were showing signs of stabilisation, albeit mixed and at weak levels.

Its board reported an improvement in revenue and margins compared to H2 2015, up 7.9% to £668.3m, although that was a 4.9% decline on the £702.6m revenue seen in the first half of last year.

Trading profit improved 10.3% on the second half of 2015, but declined 16.0% on the first half to £59.1m.

Headline earnings per share at 16p were up 6.5% on H2, but down 20% on H1 2015.

Vesuvius’ board kept the imterim dividend in line with last year at 5.15p.

It said its restructuring programme had delivered £7.1m cost savings in H1 2016 vs 2015 cost base, and the total annual restructuring programme benefits increased to £25m by the end of 2017 at a total cost of £35m.

Vesuvius had improved debtor provision coverage at the end of the period of £3.7m, and reported strong cash performance, with cash conversion of 111%

“We have delivered an encouraging result in the first half of 2016, with an improvement in financial performance relative to the second half of 2015,” said Vesuvius chief executive François Wanecq.

“This reflects the strength of our market position and progress in implementing our self-help initiatives and ongoing restructuring programme.

“Our end markets in steel and foundry are showing signs of stabilisation, although we expect them to remain at relatively weak levels for the remainder of the year,” Wanecq added.

He said that, based on the company’s strategic and operational progress in the first half, and assuming current exchange rates continue for the rest of the year, the board’s full year expectations remain unchanged.

“We remain confident in our ability to capitalise on any recovery in our addressable markets in the medium term.”