Bodycote on track, following latest trading update

Macclesfield specialist heat treatment group Bodycote is on course for the full year, it revealed in a trading update this morning.

The group, a leading provider of heat treatment and specialist thermal processing services, issued the progress report for the four month period from 1 July to 31 October.

It said group revenue for the period was £243.5m, 5% higher than the comparative period last year and 6% higher at constant currency, and in line with expectations.

“This represents solid growth, particularly given the strong performance in the comparative period in 2017,” a statement said.

Group revenue for the 10 months to 31 October 2018 grew 6% (8% at constant currency), with specialist technologies continuing its strong growth, up 11% at constant currency, both in the four month period and year-to-date.

Specifically, the group said car and light truck revenues grew 5%, notwithstanding weak background market demand in Europe and North America. The growth has been driven by continued strong performance in emerging markets and specialist technologies.

Civil aerospace revenues grew strongly at 14%, with North America and Western Europe both registering good growth.

Energy revenues grew 4%, as the oil and gas business continues to perform well, while the industrial gas turbines business weakened further with underlying revenues falling by more than 25% in the period.

General industrial revenues were 4% higher, in line with the general trends in industrial production.

Net cash as at 31 October 2018 was £16m, compared with net cash of £17.7m at 30 June 2018.

During the period the group continued to invest in its network of new and existing facilities, including a small acquisition in North America, as well as a £9m purchase of shares for the employee share benefit scheme.

Underlying cash generation remains strong.

The interim dividend of 5.7p per share was paid on 2 November 2018, at a cost of £10.1m.

Looking ahead, the group said: “As anticipated, the pace of revenue growth will moderate in the last two months given the strong prior year comparator. Bodycote’s outlook for 2018 remains unchanged.”