Bodycote reports good momentum after strong 2017

Bodycote said it had good momentum in the current financial year as the industrial heat treatment company reported a 24% increase in profit for 2017.

Headline operating profit for the year to the end of December rose to £123.9m from £99.6m a year earlier, broadly in line with company guidance. Revenue rose 14.9% to £690.2m as Bodycote won new contracts and grew in emerging markets.

At constant currency, revenue increased 9.6%. Bodycote announced a 10% increase in its ordinary dividend to 17.4p a share and a special dividend of 25p.

Bodycote shares rose 4.6% to 952.2p at 08:01 GMT.

The company provides heat treatment to improve the quality of metals and components in sectors spanning automotive, aerospace, energy and general industry. In January it reported strong trading and told investors to expect profit near the top of a range of forecasts of between £117m and £126m

Stephen Harris, Bodycote’s chief executive, said: "Strong growth was achieved through contributions from contract wins on automotive and aerospace programmes, excellent growth in emerging markets and broad-based growth across the general industrial sectors, an element of which was due to some customer restocking.”

He added: "Our business, by its nature, has limited forward visibility, but we have entered the year with good momentum.”

Revenue growth at constant currency in 2017 was 10% for general industrial customers, 4% in energy, 6% in civil aviation and 14% in automotive. Harris said that, despite the pound’s rise in 2018, the current financial year was in line with expectations.

Headline operating profit excludes amortisation of acquired intangibles and acquisition costs. Statutory pre-tax profit rose to £117m from £91.9m.