The strong pound put a brake on the financial performance of Foseco in the first half of this year.
The Tamworth company supplies consumables and technical services to foundry and steel industries round the world and is paid to a great extent in foreign currencies.
So while the half-time operating profit would have been 11.7 per cent higher in terms of constant currencies, changing exchange rates trimmed that to four per cent when reported in sterling, an improvement at constant exchange rates just £1 million higher at £25.8 million.
After financing costs and a £1.2 million exceptional charge for closing a factory in France, the formal pretax profit profit was £100,000 down on the same months last year at £21.9 million despite better margins overall. Sales were two per cent higher at £215.1 million.
Danny Rosenkranz, chairman described the result as "excellent".
"The second half of the year has begun well," he added. "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."
Jamie Pike, chief executive, pointed out that the currency changes that squeezed the first-half result in sterling occurred before January 1. Since then the pound has been relatively stable so exchange rates should be less of an issue in the second half-year.
The interim dividend is raised by 12.5 per cent to 1.73p. The shares slipped 1.75p to 215.5p, some 13.6 times brokers' estimates for the full-year earnings.
"Very strong growth in Germany is being maintained," Mr Pike said.
In the US, where falling output of heavy trucks squeezed Foseco's foundry side, as well as sales to the steel industry, things should get no worse, he added.
Investment in China had narrowed margins there, which should not continue in the second six months.
"There has also been raw materials price inflation there," Mr Pike said. "We believe we will be able to recover that in price increase, but there is always a lag."
Overall, operating profits from Foseco's foundry activities were 16.1 per cent higher at £27.4 million on a like for like basis, with turnover up 8.2 per cent to £183.3 million.
Profits from the much smaller operations serving the steel industry fell by 35.3 per cent to £1.1 million on sales 4.5 per cent higher at £41.8 million.
Foseco has been investing in its steel side with a drive into emerging markets.
Shares closed down 3p at 214.25p.