Foseco, the Tamworth supplier of consumables for foundries and steel-makers round the world, is on course to deliver forecasts made by its brokers when it brought shares back to the stock market in May.

It reported half-time profits of £17.6 million, 34.4 per cent up on the first six months of last year, boosted by a £2.1 million drop in interest charges from the flotation.

At the operating level, not counting £9.6 million of one-off costs associated with bringing the shares to market, profits were 13.3 per cent ahead at £20.4 million, including some £500,000 from currency changes. Turnover rose proportionately to £190.4 million.

"We have grown faster than the market as they said we would," said Jamie Pike, chief executive. "We are pretty pleased about it. We have absorbed some considerable price increases."

A 1.4p interim dividend is onethird of the annual total of 4.25p indicated by the house broker Collins Stewart in May. Similarly, earnings per share of 6.1p suggest that Foseco is heading for about 12p for the full year.

The foundry supplies, which account for 80 per cent of Foseco's sales pushed it operating profit up by £2.6 million to £20.1 million, on turnover 13.5 per cent higher at £153.5 million. Tonnages of castings went up all round the world.

Foseco warned, though, that while the outlook for the foundry market remains positive, growth is likely to moderate in the second six months set against a strong second half of 2004. The smaller steel side, concentrated in Europe and North America was more subdued. Steel makers accumulated stocks last winter, then held back their output to work them out of the system.

"There are signs that we are getting to the end of that process and the underlying market for steel is pretty good," Mr Pike said.