Vesuvius sees FY trading profit in line with market expectations

Molten metal flow engineering company Vesuvius said on Thursday that trading profit for 2020 is set to be broadly in line with market expectations and that demand in its end markets has improved.

Consensus is for earnings before interest, tax and amortisation of £99.2m.

In an update for the period from 1 July to the end of October, the company said demand in its end markets has improved, albeit slowly, in both the steel and foundry divisions during the third quarter. These trends have continued into Q4.

Third-quarter sales were up 7% quarter-on-quarter at constant currency and although they were down 14.3% year-on-year, this is an improvement on the 26.2% decline in the second quarter.

The improvement in trading continued into October, with sales down a more modest 7.5% compared to October 2019, Vesuvius said.

The group said it’s on track to deliver the targeted £10m per quarter of Covid-19 crisis-related savings in the second half and its restructuring programmes are on course to deliver £19.4m a year of recurring cost savings in 2020.

"Covid-19 infection rates continue to rise on a global basis and, therefore, significant uncertainty remains regarding the speed of recovery during 2021, despite the partial recovery in trading since Q2 2020," it said.