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Bodycote PLC on Wednesday announced a new £30 million share buyback and reiterated annual guidance despite ‘challenging’ market conditions. In response, shares in the Macclesfield, England-based supplier of heat treatments, metal joining, hot isostatic pressing and coatings services jumped 12% to 640.95 pence in London on Wednesday, the best performing stock in the FTSE 250 index at midday. Pretax profit rose 40% to £36.6 million in the six months to June 30 from £26.2 million a year prior despite revenue dropping 7.5% to £369.0 million from £399.0 million. Operating profit rose 34% to £41.2 million from £30.8 million with an operating margin of 11.2%, up from 7.7% a year ago. Basic earnings per share of 15.5 pence rose 52% from 10.2p. The dividend was maintained at 6.9p per share. Bodycote said performance was in line with expectations provided in May’s trading update and its full year outlook is unchanged. Market conditions remain ‘challenging’, though momentum improved through the first half with sequential growth seen in almost all end markets versus a soft second half of 2024, the firm said. Chief Executive Officer Jim Fairbairn said 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, he added. Fairburn said Bodycote made significant progress on its ’optimise, perform & grow’ strategy in the first half of the year and expects the programme to now deliver an increased annual profit benefit of at least £15 million in mid-2027 at a materially lower net cost of £10 million to £15 million. Expectations for 2025 are unchanged for savings of £4 million to £5 million. Bodycote had previously forecast savings of £12 million to £14 million at a cost of £25 million to £30 million. As part of the programme, Bodycote announced the planned sale of 10 Automotive and Industrial sites in France. This is expected to bring proceeds of around £20 million for a collection of ‘modestly profitable sites’, helping to reduce the cost of the overall programme. The CEO said full year guidance is unchanged and is in line with consensus market expectations for operating profit of £119.9 million. ‘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. Our focus continues to be on controlling costs and executing on our strategy as we transition Bodycote into a higher quality, more resilient and faster growing business. We remain confident in delivering our medium term financial targets,’ Fairburn added. In addition, Bodycote announced a £30 million share buyback to be run by Jefferies International Ltd. The firm completed a prior £30 million buyback earlier this month. The new buyback is expected to be completed no later than end January 2026. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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