ENGINEERING group Bodycote has made a spectacular return to profits overturning a pre-tax loss of £54.5m in 2009 into a £45.2m pre-tax profit last year.
The group, which has operations in Birmingham, Wolverhampton and Coventry, said a focus on key sectors including aerospace, defence, energy and automotive had been successful, delivering improved sales and operational efficiencies.
In outlook, it said it expected growth to continue this year although at a slower rate.
Revenue from continuing operations grew 14.8% to £499.8m last year, up from £435.4m in 2009 and the group said this was ahead of market improvement due to share and mix gains. It also said a cost reduction programme had been effective, delivering cumulative savings of 45m, well above the £30m recorded in 2009.
Net debt was reduced from £85.5m to £51.3m and basic earnings per share turned around a loss of 27p to a positive 14.9p.
The board has recommended a final dividend of 8.7p, up 4.8% for the full year.
Stephen Harris, chief executive said: “2010 saw a notable and pleasing improvement in the performance of the group. Better macro economic conditions were an important contributor to this and the underlying ability of the business to deliver consistently superior value has been strengthened considerably.
“Total revenue growth was well ahead of market improvement. The reorganisation of the group into market focused divisions has enhanced revenue growth and careful targeting of capital investment has improved cash flow and return on capital.”
He said looking at 2011, it was anticipated that automotive and general industrial business would continue to grow at a reasonable pace, while in aerospace, defence and energy demand had begun to recover, although within this the power generation segment remained soft, with the timing of improvement still unclear.
“In summary, the board is confident that 2011 will be another year of growth for Bodycote, albeit at a less rapid rate than experienced in 2010. The year has started in line with these expectations. Looking further out, the board sees encouraging opportunities for improved through-cycle returns.”
