Bodycote surges back to profit
MACCLESFIELD-based heat treatment company Bodycote has begun to benefit from the wide-ranging review which has taken place throughout the business over the past two years.
The company announced that revenues in 2010 from continuing operations were up 15% on the prior year to £499.8m, while it swung from a pre-tax loss of £54.5m to a profit of £45.2m.
The company said that the wide-ranging review of its business was now almost complete and had delivered a more market-focussed business structure that had improved sales opportunities.
Chief executive Stephen Harris 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.”
He argued that Bodycote’s growth had been “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.”
The cash flow improvements also helped the company to pay down its net debt, which stood at £51.3m at the year end, compared with £85.5m at the start.
Harris said that volumes improved in its automotive and general industries division, although they remained below the levels being achieved in 2008. It added that the aerospace, defence and energy industries tended to peak later in the economic cycle and that the sales growth it was still experiencing in this market – up 6.6% to £202.1m – reflected this. Its other core market, power generation, is yet to show much signs of improvement.
“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 company said.
“The year has started in line with these expectations. Looking further out, the board sees encouraging opportunities for improved through-cycle returns.”
Bodycote’s board are recommending a final dividend payment of 5.75p, which would bring the total dividend paid during the year to 8.7p per share, compared with 8.3p last year.
