- Vesuvius
- 19 November 2024 08:08:23
Source: Sharecast
The FTSE 250 company said weaker market conditions outside India and the EEMEA region, coupled with subdued demand in steel and foundry sectors, had weighed on performance.
Foundry markets in the EU27+UK, in particular, saw a significant decline compared to both the first half of 2024 and the prior year.
Despite that, Vesuvius said it achieved market share gains in its Flow Control and Foundry divisions, supported by resilient pricing and increased cost savings, now forecast at £9m for 2024.
The firm said it had continued to execute its three-year cost-savings program, aiming for at least £30m in recurring annual savings by 2026.
One-off costs related to those measures for 2024 were expected to total £12m, including non-cash charges.
Additionally, Vesuvius said it had implemented short-term cost reductions to protect profitability amid weaker end markets.
As part of its growth strategy, Vesuvius announced the acquisition of a 61.65% stake in Turkey's Piromet for €26.2m.
The move was set to strengthen its Advanced Refractory business in the growing EEMEA region, and leverage Piromet's robotics expertise.
It said the acquisition was expected to close in early 2025, pending regulatory approval.
A second £50m share buyback programme was also launched following the completion of the initial tranche, reflecting the company's confidence in its cash flow generation and commitment to shareholder returns.
While markets remain subdued, Vesuvius said it was optimistic about long-term steel and foundry fundamentals.
It said it was continuing to focus on its self-help measures to position the business for recovery.
Revenue for 2024 was now forecast at £1.86bn at current exchange rates, with trading profit expected to be £189m.
Leverage was projected to end the year toward the lower end of the company’s target range, supported by disciplined cash flow management, including a reduction in working capital intensity and capital expenditure of about £100m.
At 0806 GMT, shares in Vesuvius were up 3.52% at 382.5p.
Reporting by Josh White for Sharecast.com.
