Vesuvius 'resilient' as revenue and earnings slip in first half
Vesuvius reported a “resilient” first half performance on Thursday, in line with the prior year, despite what it described as “challenging” steel markets outside of China and light vehicle-related markets in its foundry operations.
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The FTSE 250 molten metal flow company said its underlying revenue and trading profit (EBITA) was down 1.1% and 0.5%, to £889.4m and £98.9m, respectively.
Its return-on-sales was maintained at 11.1%, while the firm managed to deliver £5.8m of restructuring savings in the six months ended 30 June.
Vesuvius said it expanded its restructuring programmes, targeting £16m of additional savings by 2021 including CCPI targeted synergies, which had increased “significantly” compared to its initial expectations.
The company’s working capital-to-revenue ratio was 23.9%, which was in line with the level at year-end 2018.
Net debt-to-last 12 months EBITDA stood at 1.3x, up from 1.0x at year-end 2018, which the board put down to the CCPI acquisition and IFRS 16 reclassification of leases.
It increased the interim dividend by 3.3%, to 6.2p per share.
“Vesuvius has delivered a solid set of results for H1 2019, despite the challenging market environment and we are announcing today a £16.0m increase in our targeted restructuring savings,” said chief executive Patrick André.
“Looking forward, assuming a stabilisation of our end markets at current levels, the board expects our trading profit for 2019 to be broadly in-line with market expectations, supported by the acceleration and intensification of efforts to optimise our costs and remains confident in our ability to grow both trading profit and return-on-sales in the coming years.”