Bodycote wipes out debt with strong annual performance

GLOBAL engineering group Bodycote has reported strong annual results, showing growth in revenues, profits and margins. Group debt has also been wiped out.

The group, which has operations in Birmingham, Wolverhampton and Coventry, was forced into major restructuring during the downturn. It said the results were “closer to the kind of performance to which we aspire.”

Underlying revenues in 2011 rose 14.2% to £570.7m, while profits, before a £4.2m impairment charge surged by 67.7% to £75.8m as the group which specialises in heat treatment of metals for industrial use saw a broad recovery in its key markets.

In line with the strong results the company, a key supplier to the aerospace, energy and automotive sectors, hiked its final dividend 25.3% to 10.9p per share.

Due to strong cash generation the group was able to pay down debt, ending the year with £100,000 in the bank, compared with borrowings of more than £53m last at the end of 2010.

Chief executive Stephen Harris said: “Bodycote’s strategy is aimed at growing the business above and beyond the background growth rate of the global economy while delivering consistently superior value. The pace of execution of this strategy is gaining momentum and we enter 2012 in good shape.
 
“The macroeconomic environment may continue to be challenging, but with nearly half of the group’s activity in areas which have long term growth drivers that are less likely to be impacted by economic headwinds we believe there is a good prospect that the business will continue to move forward in the coming year.”

After announcing a $20m investment in its Hot Isostatic Press facilities and a new partnership in the US on Wednesday, Bodycote said it had signed a deal to supply two major customers with services in Asia.

The deal with ZF Lenksysteme, a joint venture between Robert Bosch and ZF Friedrichshafen will see Bodycote will provide ZF Lenksysteme with premium heat treatment services in China for heavy truck steering components, all of which are used in Asia.