Foseco Plc, a U.K. supplier of products used by steelmakers, said 2006 profit almost doubled, led by higher sales at its foundry unit. The company may buy back as much as 5 percent of its stock.
Net income advanced to 24.0 million pounds ($46.4 million), or 14.2 pence a share, from 12.7 million pounds, or 7.5 pence, a year earlier, Tamworth, England-based Foseco said in a statement distributed by the Regulatory New Service today. Sales climbed 8 percent to 408.8 millions.
``We had improved margins and sales growth outpacing the market,'' Chief Executive Jamie Pike said in the telephone interview. ``We expect to maintain the growth rate as the demand from miners, oil refiners and heavy rail makers continues.''
The company has benefited from demand in steel foundries from oil refiners and coal miners, which have expanded their facilities as commodity prices rose. Foseco's foundry unit accounted for 80 percent of sales. The company may spend as much as 15 million pound to buy back shares, Pike said.
The shares rose 2 pence, or 1.1 percent, to 191.5 pence in London, giving the company a market value of 323.9 million pounds. The stock has dropped 2.9 percent this year.
``We have 29 million pounds in hand, enough for a buyback, while continuing other investments,'' Pike said. Foseco had 169.15 million shares outstanding as of Dec. 20, according to Bloomberg data.
`Above Market' Sales
For 2007, the company expects to have ``above market'' sales growth and maintain margins. ``From where we sit, we see a reasonable start for the next six months,'' Pike said.
The company is expanding its facilities in Eastern Europe, in Russia in particular.
``Russia is definitely on our radar screen now,'' Pike said.
The company will pay a second-half dividend of 3.41 pence a share, compared with 3.1 pence in the year-ago period. The full- year payout is 4.95 pence, compared with 4.5 pence for all of 2005.
Operating profit at the foundry unit climbed 15 percent to 47.7 million pounds.
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