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[September 2007]
Foseco Half Year Results
Some highlights of interim results for Foseco are as follows:
* Turnover of £215.1m (2006: £210.2m) up 2%
* Headline operating profit of £25.8m (2006: £24.8m) up 4%
* Headline EPS 8.3p (2006:7.7p) up 8%
* Turnover increased by 7%
* Headline operating profit increased by 12%
Commenting on the results, Danny Rosenkranz, Chairman, said: “I am delighted to report another excellent set of results. Turnover has grown strongly, before adjusting for currency and we are particularly pleased with the continuing improvement in operating profit.
''The second half of the year has begun well. We are seeing strong growth in trading, driven by Europe. We expect further growth, assuming stability in world economies and no significant strengthening of sterling.'
He added: “Foseco Foundry remains the core driver of the Group's profits as we continue to invest in the development of our Steel business. It is therefore pleasing to report that Foundry had a strong first half, driven by particularly good results from Europe.
“The smaller Foseco Steel business achieved a 4.5% turnover increase in markets that were static overall. Strategic investment continued to depress operating margins, but we have made good progress in achieving our internal milestones.
“As we indicated when we announced the full year results, the strength of sterling from mid 2006 onwards has had a significant impact on the translation of the results. Turnover was up 7.4% on a constant currency basis (£215.1m against £200.2m) but only 2.3% on a reported basis (£215.1m against £210.2m).
“For the Group as a whole, operating profit has increased by 11.7% (£2.7m) on a constant currency basis (4.0% or £1.0m on a reported basis); the operating margin has now increased to 12.0%. The tax rate has edged down and a further reduction is anticipated in 2008 as the impact of German tax reforms is now clearer.
“Also included in the results are £1.2m of exceptional costs relating to a restructuring project in Western Europe. Over the last few years, certain foundry and steel markets in this region have contracted and it is important that Foseco responds to this challenge by ensuring that it has an appropriate infrastructure. At the same time, Foseco continues to invest in both human and capital resources in growing markets; we are currently investing in increased manufacturing capacity in Poland, Turkey, Germany and India.”
Excluding the exceptional costs, profit after tax of £14.4m was up 19.0% on a constant currency basis (8.3% on a reported basis). Earnings per share pre-exceptional were 8.3 pence, up 7.8% on the figure reported for 2006.
The directors have declared an interim dividend of 1.73 pence, 12.5 % higher than the 2006 interim dividend.
ENDS