Mr Norris says most of his markets - the US steel industry and European rail industry being the exceptions - are showing signs of an upturn. Sales from the Asian operations are booming, US consumer demand is strong and the petrochemicals industry is recovering. Unfortunately that hasn't fed into the half-year figures, where underlying carbon operating profits fell 16 per cent and ceramic profits fell 27 per cent, both on broadly flat sales. Meanwhile, Mr Norris claims the benefits of the reduction in headcount won't impact until this half.
The strategy is to exit low-margin businesses to focus on the supposedly niche, technologically superior products. Disposals proceeds of pounds 33m counterbalanced the slump in first-half operating profits; further disposals should net pounds 50m. Analysts' forecasts of pounds 70m pre-tax profits and 19p earnings per share should be taken with a pinch of salt given the restructuring. The outlook for the shares is unpredictable, but there's no reason to bail out.Reuse content