Bodycote profits drop 68% as end markets remain 'mixed'

(Sharecast News) - Heat treatment and thermal processing services firm Bodycote delivered a cautious outlook on Friday as it presented its full-year results, with end markets remaining mixed after a "challenging" 2024, in which reported profits dropped sharply due to one-off impairment charges. Adjusted operating profits were up just 1.1% at £129m over the 12 months to 31 December, as an adjusted revenue decline of 5.7% to £757.1m was slightly outweighed by a 120-basis point improvement in the adjusted operating margin to 17.9%.

Statutory operating profits, however, totalled just £37.9m, down 68.2% on 2023, due to £78.3m of previously announced one-off charges.

These comprised a £28.4m impairment charge from the cessation of its ERP tech upgrade, a £31.9m restructuring charge from its Optimise programme, and a £18m goodwill write-down relating to automotive and industrial activities in North America (which the company said carried a high level of associated goodwill from historical acquisitions).

"We delivered a resilient performance in 2024, with our core business growing organically pre-surcharges and good margin improvement despite challenging conditions in many of our end markets," said chief executive Jim Fairbairn.

"This was driven by Specialist Technologies where we saw good growth and strong margin improvement, as well as decisive cost control actions taken in our Automotive and Industrial Precision Heat Treatment businesses."

Looking ahead, the company said that the current run-rate profit performance is at similar levels to the second half, with challenging conditions in automotive and industrial markets combined with strong demand in aerospace and defence.