Revenue, headline profits rise at Bodycote

Bodycote reported a 14.6% improvement in first-half revenues on Friday, to £358.5m, with constant currency growth coming in at 14.1%.

The FTSE 250 company said its headline operating profit was ahead 4% year-on-year for the six months ended 30 June at £50.5m, or 6% firmer at constant exchange rates.

Its headline operating margin narrowed, however, to 14.1%, from 15.6% in the first half of 2021.

The board said pricing and surcharges were “successfully mitigating” inflation, driving around 10% of its revenue growth.

Net debt narrowed to £57.5m, from £69.6m a year ago, while basic headline earnings per share grew 3% to 19.1p.

The board announced an interim dividend of 6.4p per share, rising from the 6.2p distribution it made at the half-year in 2021, while it left its full-year expectations unchanged.

“The group performed well in the first half,” said group chief executive Stephen Harris.

“Revenues were up 14.6%, benefiting from price increases and energy surcharges which we have successfully passed on to our customers in response to the cost inflation we have experienced.

“We have produced strong revenue growth in the majority of our markets, with civil aerospace revenues up 30%, general industrial revenues up 19% and emerging markets revenues up 22%.”

Harris said automotive revenues declined 4%, although the “significant” daily demand volatility seen in April and May was now stabilising, with Bodycote managing to contain the impact on operating efficiency to “modest” proportions.

“The price increases implemented across the business, along with the decisive management actions we have taken over the past two years, including the £30m annualised cost savings achieved from the 2020 restructuring programme, position us well to adapt to changes in market conditions.

“Our strong balance sheet also allows us to take advantage of opportunities as they arise,” Stephen Harris added.

“While there are obvious geopolitical uncertainties, as matters stand today, we see the prospect of volume growth in each of our key market sectors and geographies and we anticipate making progress in the second half.”

At 0917 BST, shares in Bodycote were up 3.35% at 601p.

Reporting by Josh White at Sharecast.com.