Bodycote hit by £122m restructuring costs
ENGINEERING giant Bodycote today posted massive losses after being hit by restructuring costs of more than £122m.
Shares in Bodycote initially fell 3% to 101p, but later rallied and were up 5% at 109.3p as the City cheered the tough action being taken by the company.
The Macclesfield-based group, which last year sold its testings business for £420m, said operating loss in the year to December 31, was £51.7m compared to a profit of £63.1m last time. Headline profit before tax was £67.6m compared to £67.8m in 2007.
Bodycote said in anticipation of a prolonged economic downturn, it has embarked on a major re-organisation of its remaining thermal processing division.
It has closed 31 facilities in the Europe, America and Asia and axed more than 1,000 jobs from its 7,700-strong global workforce.
It added that further far-reaching restructuring actions are underway, which are expected to result in annualised cost savings of around £18m.
Chief executive Stephen Harris, who recently took over from John Hubbard at the helm, said despite the uncertain economic environment, the group remains confident about its medium and long term prospects.
He said: “Following the sale of the testing activities, Bodycote is a focused business with a strong balance sheet. While automotive markets have softened, demand from aerospace, power generation and oil and gas markets remain steady.
“In response to the difficult economic and trading environment, the business is being restructured to ensure it remains strong throughout the downturn and is well positioned to benefit when trading conditions improve.
“The focus of the restructuring is to both drive down the cost base of the business while at the same time reshaping it to concentrate on those areas that present strong growth opportunities for the future.”
