Bodycote sees FY operating profit in line despite 'challenging' end markets

Bodycote said on Tuesday that full-year operating profit was set to be in line with market expectations as it hailed a "resilient performance in challenging end markets".

In an update for the period from 1 July to end of October, the provider of heat treatment and specialist thermal processing services said group revenue grew by 0.2% organically, excluding surcharges.

Bodycote noted good growth in the Aerospace and Energy focused businesses, but said conditions remain soft in Industrial Markets and Automotive.

"We retain our focus on cost control and expect to make good progress in full year headline operating margins. Operating profit for FY 2024 is expected to be in line with market consensus," it said.

By process, growth was led by Specialist Technologies, which saw organic revenue growth of 7.1%, with good progress in S3P, Hot Isostatic Pressing and Surface Technology.

Revenues in Classical Heat Treatment were down 3.3%, reflecting the low level of global industrial activity that has continued in the second half.

By end market, Aerospace & Defence revenues rose 6.3% in the period, with some moderation in growth in Civil Aerospace versus the first half, as expected. Bodycote said this reflected the impact of temporary supply chain rebalancing and the Boeing strike.

Meanwhile, Automotive revenues rose 0.5%, outperforming a weak light vehicle production environment and improving modestly compared to the first half.

Energy revenues were up 11.9% but Industrial Markets remained weak across all regions, with revenue down 6.3%.

Bodycote said: "Our end market environment remains mixed, with the challenging conditions in Automotive and Industrial Markets expected to continue into early 2025.

"Despite this backdrop, the resilience of our Specialist Technologies businesses and our ongoing focus on cost control gives us confidence in delivering good progress in operating margins for the full year (versus 15.9% delivered in FY 2023)."