Bodycote refinances as profits leap 18.5%
ENGINEERING group Bodycote said pre-tax profits jumped 18.5% last year as it announced a £107m refinancing.
In the year to the end of December the group reported a 3% rise in revenues to £587.8m while pre-tax profits rose from £75.8m to £89.8m.
The Macclesfield-based firm, which specialises in heat treatment of metals for industrial use, concluded the refinancing of a €125m revolving credit facility, which was due to mature in July, this month.
The new five-year arrangement has been supplied by a syndicate of banks involving Lloyds, HSBC, Barclays, RBS, Handelsbanken, KBC, UniCredit and Wells Fargo.
Bodycote saw particular growth in aerospace, defence and energy markets where revenue grew 11.5%, although 4.2% came from acquisitions.
In October it bought Carolina Commercial Heat Treating (CCHT) from Bluewater Thermal Solutions in a £42m deal. This was its second US acquisition in six months after buying the Curtiss-Wright Corporation’s heat treatment business in April.
The group said progress in automotive and general industrial was “particularly pleasing” because margins remained constant at 13.3% despite a 2.9% decline in income.
Chief executive Stephen Harris said: “2012 has been another year of good progress. Growth in our global aerospace and energy business outweighed the decline in automotive and general industrial markets in Europe.
“Improving business mix and the part-year benefit of acquisitions have enabled further improvements in performance and enhanced the group’s geographic balance.”
He added: “2013 has started slowly and we are mindful of the near term macroeconomic environment. Nevertheless, at this early stage in the year the board expects modest progress in 2013.
“Looking further ahead, the improvements made to the business in recent years give the board confidence that Bodycote will continue to deliver good profits and cash through the business cycle.”
David Gorman, a director at Manchester stockbroker Milkstone, said: “Bodycote has produced an excellent set of results which were ahead of our forecasts. The improvement in operating margins was particularly pleasing given the challenges faced by the group in European markets.”
