Bodycote posts strong H1 but warns of currency headwinds

31st Jul 2014 11:43

Specialist coatings group Bodycote reported a strong first half but warned of limited visibility and a bigger currency hit in the second half.The group, which heat-treats jet engine fan blades for the likes of Rolls-Royce, said operating profit before amortisation of intangibles in the six months to June 30 rose 7.1% to £56.1m.Pre-tax profit on the same basis lifted 7.7% to £54.5m despite a 1.3% fall in revenue to £312.3m due to currency volatility. Pre-tax profit rose 8.5% to £52.6m and revenue increased 4.6% at constant exchange rates.Basic earnings per share gained 11.6% to 21.1p and the interim dividend per share increased 4.5% to 4.6p.Bodycote said it continues to seek value-adding acquisitions despite an absence of buys in the first half.It said it was expanding in oil & gas markets and growth in the automotive industry was still on the up.In the aerospace market, a combination of manufacturing supply chain structural changes, stock adjustments ahead of platform changeovers and reduced defence spending are offsetting underlying growth in the sector.Work to expand the group's footprint in the aerospace manufacturers' supply chains has been stepped up in order to secure more of the latent growth available though Bodycote said this would take some time to come through.Chief executive Stephen Harris said: "The group delivered a strong first half performance. Organic growth and margin improvement were affected by currency headwinds, which at current exchange rates will have a greater impact in the second half. "Noting that the group has limited forward visibility, the board continues to expect further progress in 2014 on a constant currency basis."Shares rose a penny to 694p at 09:57 in London.PW