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Bodycote profits down amid 'tough' market conditions
12th Mar 2020 08:47
(Sharecast News) - Bodycote reported a 1.2% fall in revenue in its full-year results on Thursday, to ?719.7m, or a 2% decline at constant currency.
The FTSE 250 heat treatment and coating company said its headline operating profit was down 4% for the year ended 31 December, or 5% at constant exchange rates, to ?134.9m.
Its return on sales weakened to 18.7% from 19.3%, while its headline profit before tax was down 5% at actual and constant currency, at ?130.2m.
Free cash flow was down 8% year-on-year at ?123.1m, while basic headline earnings per share were 7% weaker, at 52.1p.
Bodycote reported a return on capital employed of 17.7%, which was down from 18.9% in 2018.
The board described the 18.7% margin for the year as "resilient", despite some tough market conditions, adding that it had taken "significant" actions in a bid to reduce costs.
Civil aerospace revenues were up 17%, and specialist technologies revenues were ahead 3%, with that division said to be continuing to outperform.
Classical heat treatment revenues were 4% lower, although the company noted that revenues in emerging markets were 5% higher.
Bodycote said its free cash flow conversion was "strong" at 91%, and reported a total expansionary investment of ?61m in strategic growth areas during the year.
The ?154m acquisition of Ellison Surface Technologies strengthened its aerospace business and its specialist technologies division, with that transaction expected to complete in the first quarter.
Its board said the full-year ordinary dividend was being raised 5.3% to 20p, although no special dividend was being paid for the year, knocking 20p off the total dividend for 2019.
"Bodycote delivered a robust performance in 2019, achieving a resilient operating margin despite challenging market conditions," said group chief executive Stephen Harris.
"2020 has started with a number of challenges, notably Covid-19, and ongoing international trade tensions."
Harris said the potential impact of the Covid-19 coronavirus pandemic was "difficult to assess" at the current time.
"However, Bodycote has a proven track record of margin enhancement through cost management and improving the mix of business and we will continue to manage the cost base in response to market conditions whilst investing in our strategic growth areas of aerospace, specialist technologies and emerging markets."
At 0854 GMT, shares in Bodycote were down 11.86% at 565p.
The FTSE 250 heat treatment and coating company said its headline operating profit was down 4% for the year ended 31 December, or 5% at constant exchange rates, to ?134.9m.
Its return on sales weakened to 18.7% from 19.3%, while its headline profit before tax was down 5% at actual and constant currency, at ?130.2m.
Free cash flow was down 8% year-on-year at ?123.1m, while basic headline earnings per share were 7% weaker, at 52.1p.
Bodycote reported a return on capital employed of 17.7%, which was down from 18.9% in 2018.
The board described the 18.7% margin for the year as "resilient", despite some tough market conditions, adding that it had taken "significant" actions in a bid to reduce costs.
Civil aerospace revenues were up 17%, and specialist technologies revenues were ahead 3%, with that division said to be continuing to outperform.
Classical heat treatment revenues were 4% lower, although the company noted that revenues in emerging markets were 5% higher.
Bodycote said its free cash flow conversion was "strong" at 91%, and reported a total expansionary investment of ?61m in strategic growth areas during the year.
The ?154m acquisition of Ellison Surface Technologies strengthened its aerospace business and its specialist technologies division, with that transaction expected to complete in the first quarter.
Its board said the full-year ordinary dividend was being raised 5.3% to 20p, although no special dividend was being paid for the year, knocking 20p off the total dividend for 2019.
"Bodycote delivered a robust performance in 2019, achieving a resilient operating margin despite challenging market conditions," said group chief executive Stephen Harris.
"2020 has started with a number of challenges, notably Covid-19, and ongoing international trade tensions."
Harris said the potential impact of the Covid-19 coronavirus pandemic was "difficult to assess" at the current time.
"However, Bodycote has a proven track record of margin enhancement through cost management and improving the mix of business and we will continue to manage the cost base in response to market conditions whilst investing in our strategic growth areas of aerospace, specialist technologies and emerging markets."
At 0854 GMT, shares in Bodycote were down 11.86% at 565p.