Bodycote sees upturn in sales

BODYCOTE, the global engineering company specialising in thermal processing of metals, said today it had seen an upturn in sales since April.

If the trend continued, annual profits will be ‘significantly above’ the top range of City forecasts, it added.

The company, which has sites in Coventry and Birmingham and has been hard hit by the global recession, said that since the end of April its sales had seen a “steady and broad-based improvement”.

Revenues for the six months to the end of June are expected to be up 8% on the same period in 2009, 9% at constant exchange rates.

At the same time Bodycote – whose customers include some of the world’s biggest aerospace and automotive companies – said it was continuing to see the benefits of reductions to its cost base after a large-scale group restructuring programme which began in late 2008 and is nearing completion.

While conceding that, because of usual seasonal demand variations, second half sales are likely to be lower than those seen in the first six months of 2010, Bodycote is cautiously optimistic over its full-year prospects.

It said: “If current levels of demand are sustained and allowing for normal seasonal differences between the first and second half, the board now expects that headline operating profit for the year will be significantly above the top of the current range1 of full year forecasts.”

According to Bloomberg, this currently ranges form £27.2m to £34.7m.

Bodycote’s thermal processing services cover three key areas: heat treatment and metal joining; hot isostatic pressing and surface technology.

Heat treatment is used to improve the properties of metals and alloys, for example, by increasing hardness, wear resistance and fatigue strength.

Hot isostatic pressing uses very high pressure inert gas at elevated temperatures in order to improve the properties of metals and other materials.

Surface technology uses specialist coatings to prolong the working life of components and protect them from environmental factors such as corrosion and abrasion.