Bodycote reports underlying growth in Q1

Heat treatment and thermal processing services group Bodycote has left its full-year outlook unchanged after reporting solid underlying growth since the start of 2024 against a mixed market backdrop.

Group revenues in the four months to 30 April declined to £268m, from £281m the year before, though organic growth at constant currency excluding surcharges would have been 2.7%.

The company said that underlying growth was offset by surcharges, which halved to around £14m as energy prices fell, as well as a foreign exchange headwind of £10m compared with last year.

Organic revenues at the Specialist Technologies division grew by 10.5% on last year, helped by strong performances in Surface Technology and Hot Isostatic Pressing, while the Classical Heat Treatment segment saw declines of 1.0%.

Jim Fairbairn, who is due to start as chief executive at Thursday's annual general meeting following his appointment in October, said: "Bodycote continues to demonstrate good growth against a mixed picture of end market dynamics and the Group is well positioned for the remainder of 2024."

By end market, organic constant currency growth excluding surcharges was 16.2% in aerospace and defence but 1.8% declines were registered in both the automotive and general industrial sectors.

Despite the mixed performance, Bodycote said it still expects to make "further progress" in 2024, "including another step towards our medium-term operating margin target of more than 20%".

"Over the coming weeks I will progress the review of our strategic and operational priorities, and look forward to sharing my early observations about the company at our interim results presentation on July 30th," Fairbairn said.