Bodycote buyback begins as revenue tops £802m

Bodycote, the Macclesfield-based heat treatment and thermal processing giant, said its 2023 revenue rose 8% to £802.5 million and profit before tax profit increased 17% to £111.7 million.

Full year dividend per share is up 7% to 22.7p, maintining the company’s 36-year record of growing or maintaining the payout to shareholders.

A £60 million share buyback programme announced by the firm in January will commence on March 15, 2024.

The company’s shares rose about 4%.

Bodycote said its General Industrial (including energy) revenue increased 6% to £394 million, Aerospace & Defence revenue increased 15% to £214 million, and Automotive revenue was 6% higher at £195 million.

Bodycote CEO Stephen Harris said: “In 2023 we once again delivered strong revenue growth and improved financial performance, as well as making progress against our strategic focus areas.

We delivered significant headline operating profit margin improvement, notably in the ADE business, helping to drive group margins to 17.3%, excluding surcharge revenue. Headline EPS increased by 13% to 48.4p.

“Bodycote returned to the strong levels of cash conversion which are more typical for the business, with free cash flow of £123m, up 46%, reflecting improved working capital management.

We will continue to deliver on our strategic focus areas in 2024, including driving growth in Specialist Technologies, capitalising on the growth opportunities from delivering carbon reductions for our customers, and integrating the newly acquired Lake City business.

Despite macroeconomic uncertainty we expect to deliver further progress in 2024. We anticipate a reduction in the level of energy surcharges, reflecting further normalisation of energy prices.

2024 should see us take another step towards our medium term margin target of more than 20%.

The board remains confident in the group’s prospects for continued profitable growth.”