Bodycote PLC says aerospace markets are still under a cloud
It was undoubtedly a tough year for the engineer, which counts the hard-hit aerospace sector as one of its key markets
Bodycote PLC () has maintained its 30+ years streak of maintaining its dividend despite a tough year that saw it cut hundreds of jobs.
The supplier of specialist testing and thermal processing services has been hit hard by the fall-out from the coronavirus pandemic and the concomitant travel restrictions, which have affected the aerospace sector (one of its key markets).
In 2020, revenue slumped 16.9% to £598.0mln from £719.7mln in 2019.
The engineer slipped into the red with a loss of £1.5mln compared to a profit of £123.9mln in 2019, after £58.4mln of exceptional charges, including £35.7mln of restructuring costs.
That did not stop the board from nudging up the full-year dividend to 19.4p from 19.3p in 2019.
“Bodycote weathered the adversity of 2020 generating a headline EBITDA [underlying earnings] margin of 26.4%, a headline operating margin of 12.6%, and producing a strong free cash flow conversion of 141% (£106mln),” said Stephen Harris, the chief executive.
“Looking ahead, markets are recovering, though the uncertain timeline for recovery in the civil aerospace market clouds the short-term outlook for this part of the business. Nonetheless, our restructuring programme is now largely complete, resulting in a higher quality business aligned to the growth opportunities we are seeing. The board is confident that Bodycote is well placed to drive growth and take advantage of the upturn in activity across all of its markets as they strengthen,” the CEO added.
Bodycote shares were down 1.3% at 792p in the first hour of trading.
Read More: Bodycote PLC says aerospace markets are still under a cloud