The Board Vesuvius has recommended a final dividend of 14.3 pence, bringing the total dividend for the year to 17.4 pence per share (2019: 6.2 pence per share, following the cancellation of the 14.3p proposed final 2019 dividend).
The Board has determined that this level of dividend is appropriate for the level of business activity in 2020, while also considering the strong cash flow generation, and that the Company has sufficient liquidity and overall balance sheet strength to justify payment, whilst also maintaining flexibility to fund both organic and inorganic growth, as opportunities arise.
The decision not to pay a final dividend for 2019 was taken in April 2020, due to the unprecedented uncertainty in the business environment at that time. This decision was not taken lightly and they fully recognise the importance of dividend payments to shareholders. We reinstated dividend payments at the earliest opportunity with the announcement of an interim dividend in October 2020.
If approved at the Annual General Meeting on 12 May 2021, the final dividend will be paid on 21 May 2021 to shareholders on the register at the close of business on 16 April 2021. The last date for receipt of elections from shareholders for the Vesuvius Dividend Reinvestment Plan will be 29 April 2021.
Other financial highlights include:
Negative impact of the Covid-19 crisis on revenues, which declined by £252.1m to £1,458.3m
Steel division's market outperformance in India, Vietnam, Turkey, Russia, Ukraine and South America, positions the Group well in these high-growth markets
Successful delivery of £39.0m of temporary Covid-related savings to mitigate the impact of the crisis on the Group, made possible by entrepreneurial and decentralised business model
o More than £8m of savings are expected to recur in 2021 based on permanent changes in working practices and reduced operating expenses
Delivered recurring restructuring savings of £20.6m, ahead of the planned £19.4m for the year. Further recurring restructuring savings of £4.3m will be realised in 2021, as we benefit from the full year impact of restructuring actions taken during 2020
Maintained industry-leading R&D investment, supporting future new product launches and top-line growth, leaving the Group ideally positioned for recovery
Our recently completed restructuring programme has resulted in an optimised manufacturing network geared for growth
Trading profit of £101.4m (down £80m versus 2019), with Return on Sales of 7.0%, reflecting the impact of the pandemic
Strong cash performance with £175.2m of adjusted operating cash flow (173% cash conversion), demonstrating an ability to generate positive cash flow across the cycle
Strong working capital performance, with working capital / sales improving to 23.2% versus 24.0% at the end of 2019
Net debt reduced to £175.1m compared to £245.8m in 2019, with net debt/EBITDA of 1.2x
Launch of a new Group Sustainability Initiative, with positive momentum on intermediate ESG targets and commitment to reach a net zero carbon footprint at the latest by 2050