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(Alliance News) - Molten metal flow engineering firm Vesuvius PLC reported declining revenue on Thursday as both of its main markets weakened.
Vesuvius's revenue in 2019 fell 4.9% on the year before to GBP1.71 billion. The underlying change, which is at constant currency rates and excludes M&A, was a 5.7% decline from 2018.
Pretax profit dropped by 24% as a result to GBP118.6 million, and the headline figure, which excludes various items, was 9.3% reduced at GBP171.4 million.
London-based Vesuvius declared a 14.3 pence per share final dividend, taking the year's total to 20.5p, which is up 3.5% on the previous year.
"We delivered a robust operational performance in 2019, despite challenging conditions. Key end-markets were especially weak during the fourth quarter of 2019, and we expect this abnormally low level of activity to continue at least in first-quarter 2020 and to weigh on performance in first-half 2020," said Chief Executive Patrick Andre.
Crude steel production fell 1.7% around the world in 2019, Vesuvius noted, excluding China. This got steadily worse, it continued, while the Foundry business also faced a weakening market.
The Steel division's revenue fell 3.3%, and trading profit fell 6.5%, to GBP1.20 billion and GBP120.1 million respectively. Foundry revenue dipped 8.2% to GBP515.1 million and trading profit by 11% to GBP61.3 million.
Vesuvius early in the year accelerated an ongoing restructuring programme, and it achieved GBP16.4 million of savings during the year. The restructuring is mainly focused on rationalising manufacturing, consolidating production, and streamlining the back office.
Looking ahead, CEO Andre said: "The potential impact of the Covid-19 health crisis is difficult to assess at this time but is likely to have a temporary negative impact on our end-markets.
"However, there are some signals indicating that the destocking phase experienced in the second-half 2019 is maturing and may shortly be coming to an end. Thanks to our restructuring efforts, our reinforced emphasis on innovation in the service of our customers and our dedicated workforce, Vesuvius is ideally positioned to benefit from the normalisation in our end markets as this occurs."
Shares were 0.2% lower on Thursday morning in London at a price of 410.60 pence each.
By George Collard; georgecollard@alliancenews.com
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