Bodycote PLC on Tuesday said operating profit in 2024 will be in line with market expectations, despite ‘soft’ conditions in its key market segments.
Macclesfield, Cheshire-based Bodycote is a provider of heat treatment and specialist thermal processing services.
Bodycote said business conditions ‘remain soft’ for its Industrial Markets and Automotive sectors, while its Aerospace and Energy businesses have delivered ‘good growth’ so far in 2024.
Group revenue for the 10 months to the end of October was £643.4 million, down 3.1% from a year before. Revenue was up 1.0% on an organic basis excluding energy-related surcharges. These are down by £27 million so far in 2024, due to lower energy input costs.
In the four months since July 1, revenue was down 2.8% on year, or up 0.2% excluding the surcharges.
By process, revenue excluding the surcharges was up 7.5% in the year to date in Specialist Technologies but down 2.2% within Classical Heat Treatment. In the most recent four months, this was up 7.1% and down 3.3%, respectively, suggesting a worsening in conditions.
By market sector, revenue on the same basis was up 11% in both Aerospace & Defence and Energy, but it was down 7.0% in Industrial Markets and down 0.5% in Automotive. In the recent four months, Aerospace & Defence was up 6.3% and Energy up 12%, while Industrial Markets was down 6.3% and Automotive up 0.5%.
Looking ahead, Bodycote said that while the ‘challenging conditions’ in Automotive and Industrial Markets are expected to continue into early 2025, strength in the Specialist Technologies businesses, combined with cost control, will result in progress on operating profit margin in 2024 from the 15.9% recorded in 2023.
Operating profit in 2024 is expected to be in line with market consensus, which Bodycote put at £127.9 million. This would be flat on headline operating profit of £127.6 million in 2023. In 2025, analysts forecast this to rise to £137.0 million.
Bodycote shares were trading at 607.00 pence, up 5.6%, on Tuesday morning in London.
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