Bodycote makes strategic progress, reaffirms FY guidance

(Sharecast News) - Heat treatment specialist Bodycote stuck to its guns in the first half, navigating weak demand and restructuring headwinds to post a resilient set of interim numbers. Bodycote said revenues had dipped 7.5% to £369m, weighed down by weakness in the automotive and industrial segments and delivery timing in its high-margin specialist technologies arm. Adjusted operating profits fell 17.5% to £55.1m, though statutory profits rebounded sharply thanks to lower one-offs.

Earnings per share were down 14.8% on an adjusted basis but up 52% on statutory terms, while free cash flow came in lighter at £18.0m, reflecting lower earnings and spend linked to its ongoing "Optimise" restructuring programme.

Despite near-term headwinds, Bodycote stuck to its FY guidance of operating profits between £115.7m and £123m, and pointed to a stronger H2 performance, driven by aerospace tailwinds, the ramp-up of new contracts, and further benefits from Optimise.

The FTSE 250-listed firm also raised its profits target for the programme to at least £15m, up from £12m to £14m, with site disposals helping fund expansion at a lower cost than initially expected.

CEO Jim Fairbairn said: "Trading has been in line with our expectations following our May update. Demand is strong in industrial gas turbines, as well as in aerospace and defence where supply chain conditions are improving. Automotive and industrial markets remain weak but saw modest improvement versus a soft second half of 2024.

"While the macro environment remains uncertain, we expect higher profit in the second half underpinned by Optimise benefits, continued recovery in aerospace, and improved specialist technologies performance as we deliver new contract wins."

As of 0835 BST, Bodycote shares had shot up 12.66% to 645.00p.

Reporting by Iain Gilbert at Sharecast.com