Bodycote overcomes ‘challenging conditions’ and embarks on growth strategy
Annual revenues and profits have shrunk at Bodycote, the Macclesfield-based provider of heat treatment and specialist thermal processing services, in what CEO Jim Fairbairn described as a “resilient performance”.
Publishing its results for the year to December 31, 2024, today, the group revealed turnover of £757.1m, down from £802.5m the previous year, and a pre-tax profit of £28.4, compared with £111.7m in 2023.
The operating profit was £37.9m, against £119.2m a year ago.
A full year dividend of 23p per share is a 1.3% improvement on last year’s payout.
The group incurred previously indicated exceptional charges of £31.9m, related to the optimisation programme, £28.4m ERP (Enterprise Resource Planning)-related impairment, and a goodwill impairment of £18m.
During the reporting period the group returned almost £100m to shareholders, through a £40m dividend and a £60m share buyback scheme.
A further £30m buyback is currently under way.
Regarding the current financial year, Bodycote said its end markets remain mixed, with challenging conditions in automotive and industrial.
Structural demand in aerospace and defence remains strong, although there continues to be a temporary impact from industry-wide supply chain disruption.
Reflecting this backdrop, current run-rate profit performance is at a broadly similar level to the second half of 2024.
CEO, Jim Fairbairn, said: “We delivered a resilient performance in 2024, with our core business growing organically pre-surcharges and good margin improvement, despite challenging conditions in many of our end markets.
“This was driven by specialist technologies where we saw good growth and strong margin improvement, as well as decisive cost control actions taken in our automotive and industrial precision heat treatment businesses.”
He added: “At our capital markets event in December we laid out a simplified reporting structure, a new strategic approach, and a set of comprehensive financial targets.
“Going forwards our reporting will be based on two leading, technology-focused divisions – specialist technologies and precision heat treatment.
“Our strategy consists of three key levers – optimise, perform and grow. Through these levers we will enhance the quality of the business, improve our operational performance and accelerate growth, all supported by sustainability.
“Underpinned by these actions, we also announced a set of compelling medium term financial targets. We have already begun to deliver on these strategic initiatives, including commencing with our plant footprint optimisation, rolling out the HEAT programme to initial pilot sites, and proceeding with initial growth investments aligned to our target areas. We are already seeing tangible early benefits from these actions.
“I believe there is a significant opportunity in front of us to reach Bodycote’s full potential and to deliver greater shareholder value. With a new strategy, simplified reporting structure, and ambitious, but achievable targets in place, our focus is now on execution.”
