Bodycote plc has reported a strong performance in what the company describes as a difficult economic environment. Headline operating profit was up 14.4% to £97.9m with revenue for the year at £587.8m (up 3%, or 6.4% at constant currency).
Sales growth of £17.1m included a contribution of £22.4m from acquisitions but was impacted by £19.6m of foreign exchange translation headwind.
“2012 has been another year of good progress. Growth in our global Aerospace and Energy business outweighed the decline in Automotive and General Industrial markets in Europe. Improving business mix and the part-year benefit of acquisitions have enabled further improvements in performance and enhanced the Group’s geographic balance,” stated Stephen Harris, Chief Executive.
The Aerospace, Defence and Energy business took full advantage of the strong markets and delivered sales growth of 11.5%, of which 4.2% came from acquisitions, with margins expanding to 26.7% (2011: 21.9%), stated the company. Progress was particularly positive in the Automotive and General Industrial segments. Even though revenues declined by 2.9%, notwithstanding adding 3.8% from acquisitions, margins remained constant at 13.3% providing continued evidence of the improved resilience of Bodycote’s profitability.
Return on capital employed increased to 19.5% (2011: 16.9%) on the back of the higher level of profits and carefully managed net capital expenditure of £47.7m. Capital expenditure was targeted at expansion of aerospace capacity and greenfield sites in emerging economies together with a focus on specific technologies such as Specialty Stainless Steel Processes® (S3P), HIP Product Fabrication, Corr-i-Dur® and Low Pressure Carburising.