Macclesfield-based heat treatment and thermal processing giant Bodycote said on Thursday its revenue fell 16.3% to £306.7 million in the six months to June 30 as it swung to a pre-tax loss of £3.8 million compared to a profit of £62.2 million at the same stage of 2019.
Nonetheless, Bodycote has decided that its deferred dividend for 2019 of 13.3p will now be paid on September 25, and a decision on an interim dividend for 2020 will be made in due course.
In May, Bodycote said it would cut 700 jobs — about 13% of workforce — amid the coronavirus crisis.
“Bodycote’s performance in the first half was dominated by the sharp impact of the pandemic related demand reductions which started in the third week of March,” said the firm.
“Until this point activity levels had been unaffected.
“Second quarter revenues on a like-for-like basis were 33% below those in the prior year, reflecting the impact of shutdowns at our customers’ locations.”
Boycott CEO Stephen Harris said: “In terms of business performance, Bodycote reacted swiftly to the sharp revenue declines arising from the pandemic related downturn.
“Most cost elements have been reduced in line with sales which has yielded a resilient operating margin of 12.3%.
“Moreover, the excellent free cash flow performance is testament to the cash generative nature of our business.
“The organisational restructuring programme announced in March has been expanded and accelerated and will permanently reduce operating expenses by around 10%.
“This allows good profits to be achieved at lower volumes and should enable margin expansion beyond historical levels when revenues ultimately return to normal.
“The immediate outlook varies by sector and is difficult to predict for obvious reasons.
“Bodycote benefits from its geographic and sector diversification, and its strong business model.
“We remain focused on strong cash and cost discipline and we expect to continue to generate sustainably attractive returns for our shareholders.”