TIDMBOY
RNS Number : 3289H
Bodycote PLC
27 July 2023
Bodycote plc
Interim results for the six months to 30 June 2023
"Strong first half performance, modestly ahead of
expectations"
Financial summary
% Change
Half Half year
year to to % Constant
30 June 30 June
2023 2022 Change Currency
Revenue GBP420.1m GBP358.5m 17.2% 13.8%
---------------------------------------- ---------- ---------- ------- ---------
Headline operating profit(1) GBP62.8m GBP50.5m 24% 23%
---------------------------------------- ---------- ---------- ------- ---------
Headline operating margin(1) 15.0% 14.1%
---------------------------------------- ---------- ---------- ------- ---------
Free cash flow(1) GBP56.2m GBP31.8m 77%
---------------------------------------- ---------- ---------- ------- ---------
Net debt(1,5) GBP26.6m GBP57.5m
---------------------------------------- ---------- ---------- ------- ---------
Basic headline earnings per share(1,2) 23.8p 19.1p 25%
---------------------------------------- ---------- ---------- ------- ---------
Interim dividend per share 6.7p 6.4p 5%
---------------------------------------- ---------- ---------- ------- ---------
Additional statutory measures
Half Half year
year to to
30 June 30 June
2023 2022
Operating profit GBP58.7m GBP45.0m
------------------------------------ --------- ----------
Profit after tax GBP42.9m GBP32.5m
------------------------------------ --------- ----------
Net cash from operating activities GBP92.5m GBP61.0m
------------------------------------ --------- ----------
Basic earnings per share 22.2p 16.9p
------------------------------------ --------- ----------
Highlights
Results
-- Revenue up 17.2% to GBP420.1m (13.8% at constant
currency)
-- 8.0% revenue growth(3) excluding energy-related
surcharges
-- Headline operating profit 23%(3) higher at GBP62.8m
-- Operating margin of 16.5%, up 180 bps excluding energy
surcharge revenues. Headline operating margin up 90 bps to
15.0%
-- Free cash flow improved to GBP56.2m; 90% cash flow conversion
(H1 2022: GBP31.8m, 63% conversion)
Key Achievements
-- Strong first half performance, modestly ahead of
expectations
-- Energy surcharges continue to recover energy cost
inflation
-- Price increases successfully implemented, covering labour and
other cost inflation
-- 8% revenue growth(4) achieved in H1 led by:
-- Specialist Technologies up 13%
-- Emerging Markets up 10%
-- Civil Aerospace up 10%
-- Oil & Gas up 46%
-- Automotive up 8%
-- Delivering on all strategic priorities and on track to
achieve a margin in excess of 20% over the medium term
Commenting, Stephen Harris, Group Chief Executive, said:
" We have delivered a strong performance in the first half,
which was modestly ahead of our expectations and with broad-based
growth across most of our end markets. In particular, we achieved
good progress in our strategic focus areas of Specialist
Technologies, Emerging Markets, Civil Aerospace and electric
vehicles. We continue to manage inflationary cost pressures well
through energy surcharges and price increases. The Group remains on
track to achieve a margin in excess of 20% over the medium
term.
Cash conversion improved and net debt reduced in the period. The
strength of our balance sheet continues to provide options to drive
shareholder value, in line with our disciplined capital allocation
framework.
The strong first half performance underpins our confidence in
delivering progress for the full year.
Looking beyond 2023, the Board remains confident in the Group's
prospects for continued profitable growth. "
1 The headline performance measures represent the statutory
results excluding certain items and are considered alternative
performance measures (APMs). A reconciliation to the nearest IFRS
equivalent is provided at the end of this report.
2 A detailed earnings per share reconciliation is provided in
note 5 to the condensed consolidated financial statements.
3 At constant currency.
4 At constant currency excluding energy surcharges.
5 Net debt excluding lease liabilities.
Interim Results Presentation
Bodycote will be hosting a presentation for investors and
analysts at 10.00 am UK BST on 27 July 2023. The presentation will
also be webcast live. Please find connection instructions
below:
Webcast: https://www.bodycote.com/cast2023
Conference call details:
Participant dial-in numbers are:
United Kingdom: +44 800 358 1035
United Kingdom
local: +44 20 4587 0498
Participant Code: 145132
The presentation will be a live webcast. The audiocast and
presentation will be available at www.bodycote.com in the investor
section on 27 July 2023.
For further information, please contact:
Bodycote plc FTI Consulting
Stephen Harris, Group Chief Executive Richard Mountain
Ben Fidler, Chief Financial Officer Susanne Yule
Tel: +44 1625 505 300 Tel: +44 203 727 1340
About Bodycote plc
With more than 165 accredited facilities in 22 countries,
Bodycote is the world's largest provider of heat treatment and
specialist thermal processing services. Through Classical Heat
Treatment and Specialist Technologies, including thermal spray
coatings, Bodycote improves the properties of metals and alloys,
extending the life of vital components for a wide range of
industries, including Aerospace, Defence, Automotive, Power
Generation, Oil & Gas, Construction, Medical and
Transportation. Customers have entrusted their products to
Bodycote's care for more than 50 years. For more information, visit
www.bodycote.com .
Half Year Commentary
Overview
The Group delivered a strong performance in H1, with revenues
increasing 17.2% to GBP420.1m (13.8% at constant currency). Energy
related surcharges accounted for 6% of the reported growth
rate.
Revenue growth, excluding surcharges and at constant currency,
was 8.0% driven by strong progress in Specialist Technologies,
Emerging Markets and Civil Aerospace. In line with our strategic
priorities, and reflecting the focused investments we are making,
Specialist Technologies revenues rose by 13% (excluding
surcharges), achieving significantly higher growth than the 6%
growth (excluding surcharges) within our Classic Heat Treatment
business.
Headline operating profit increased 24.3% to GBP62.8m from
GBP50.5m in H1 2022. Headline operating margin was 15.0% (H1 2022:
14.1%). Adjusting for the effect of energy surcharge revenues,
headline operating margin increased by 180 bps to 16.5% (H1 2022:
14.7%). The improvement in operating margin reflected price, volume
growth and operational improvements together with the
non-recurrence of the GBP5m energy surcharge shortfall we
experienced in H1 2022.
Statutory operating profit increased from GBP45.0m to
GBP58.7m.
The Group delivered improved free cash flow of GBP56.2m
representing a cash flow conversion of 90% (H1 2022: GBP31.8m, 63%
conversion), reflecting higher profitability and a lower working
capital outflow from better receivables management. The balance
sheet remains healthy, with closing net debt excluding lease
liabilities reduced to GBP26.6m (FY 2022: GBP33.4m) after payment
of GBP28.5m dividends to shareholders and GBP12.2m for the purchase
of 1.85m shares into our Employee Benefit Trust to satisfy future
share based incentive schemes.
Basic headline earnings per share for the Group increased by
24.6% to 23.8p (H1 2022: 19.1p). Basic earnings per share were
22.2p (H1 2022: 16.9p), reflecting the increase in statutory
operating profit.
The following commentary reflects constant currency growth rates
versus the comparable period last year, unless stated
otherwise.
Market Sectors
The Group's strategy is to focus on investing in and growing key
areas of our business while improving the operating efficiency and
quality of the remainder of the business. Our strategic focus areas
comprise Specialist Technologies, Emerging Markets, and the secular
growth markets of Civil Aerospace and electric vehicles. First half
results highlighted further progress in delivering on these
strategic priorities.
Specialist Technologies continued their superior performance
with 15.6% growth in revenues (13.0% excluding surcharges). The
additional sales and marketing expertise we have been building,
together with the capacity expansion we have invested in, are
driving revenue growth in all our key end markets. We continue to
add capacity to Specialist Technologies through disciplined capital
investment in order to position the Group for continued superior
growth in these technologies.
Emerging Markets revenue growth was 15.5% (10.2% excluding
surcharges) reflecting strong rates of growth in Eastern Europe and
Turkey. The outlook for our businesses in these regions remains
strong and we are adding further capacity to enable us to maintain
this good momentum. Our revenue growth in China was subdued in the
first half, reflecting the country's slower than expected rate of
recovery post the COVID lockdowns.
Aerospace & Defence revenues were 14.7% higher (8.5%
excluding surcharges), driven by good growth in Civil Aerospace of
16.4% (9.6% excluding surcharges). Growth was driven by the
continued increases in aircraft OEM production rates and higher
aftermarket related demand together with our growing presence on
new generation aircraft and engine platforms. We delivered higher
growth in our European aerospace operations than in the US in H1,
where growth was moderated by the difficulties encountered by
customers' supply chains as they ramp up. We are starting to see
these issues ease.
Automotive revenues increased by 14.0% (8.3% excluding
surcharges). Underlying growth in H1 was ahead of our expectations
and was led by Emerging Markets, focused in particular on the
strong progress we are making in Eastern Europe. We had success in
the first half securing a number of major new long-term contracts
for electric vehicle related activity which are currently going
through their pre-production phase. Start of production on these is
expected to commence in Q1 2024. While electric vehicle related
revenues are still relatively modest today, we expect these
revenues to grow substantially from 2024 onwards.
General Industrial (including energy) revenues increased by
13.2% (7.6% excluding surcharges). We achieved strong growth in Oil
& Gas and Medical, which constitute 17% of the revenues for
this reported end market segment. The slower growth in certain
General Industrial subsegments, notably Tooling and Industrial
Machinery, which we had started to see towards the end of 2022,
continued through the first half of this year.
Sustainability
Our internal carbon reduction initiatives are progressing well
and we continue to deploy our expertise to help reduce our
customers' carbon emissions.
Dividend
The Board has declared an interim dividend of 6.7p (2022: 6.4p)
which will be paid on 10 November 2023 to all shareholders on the
register at close of business 6 October 2023.
Summary and outlook
We have delivered a strong performance in the first half, which
was modestly ahead of our expectations and with broad-based growth
across most of our end markets. In particular, we achieved good
progress in our strategic focus areas of Specialist Technologies,
Emerging Markets, Civil Aerospace and electric vehicles. We
continue to manage inflationary cost pressures well through energy
surcharges and price increases. The Group remains on track to
achieve a margin in excess of 20% over the medium term.
Cash conversion improved and net debt reduced in the period. The
strength of our balance sheet continues to provide options to drive
shareholder value, in line with our disciplined capital allocation
framework.
The strong first half performance underpins our confidence in
delivering progress for the full year.
Looking beyond 2023, the Board remains confident in the Group's
prospects for continued profitable growth.
Business review
Bodycote has more than 165 facilities around the world which are
organised into two customer-focused businesses: the AGI business
and the ADE business.
The following review reflects constant currency growth rates
versus the comparable period last year unless stated otherwise.
The AGI divisions
Revenue for the first half of the year was GBP 239.6 m, an
increase of 11.1 % on the prior year ( 14.3 % at actual rates).
Excluding surcharges, revenue grew by 4.9% driven by increased
demand in our Automotive business with modest growth from General
Industrial markets during the half.
Headline operating profit increased to GBP43.7m (H1 2022:
GBP35.0m), with headline operating margins rising from 16.7% to
18.2%. The increase in profitability was driven by operational
improvements in addition to the non-recurrence of the surcharge
shortfall, which impacted H1 2022. Statutory operating profit
increased to GBP42.9m (H1 2022: GBP33.7m).
Net capital expenditure was GBP 14.3 m (H1 2022: GBP13.2m) with
ongoing expansion in Emerging Markets, particularly in Eastern
Europe.
The ADE divisions
First half revenues rose by 17.5% to GBP180.5m, an increase of
21.2 % at actual rates. Excluding surcharges, revenue grew by
12.1%, reflecting good growth in Civil Aerospace and strong
progress in Oil & Gas revenues. Headline operating profit was
GBP 32.2 m (H1 2022: GBP23.3m), with headline operating margins
increasing to 17.8% (H1 2022: 15.6%). Statutory operating profit
grew to GBP28.9m (H1 2022: GBP19.6m).
Net capital expenditure in the period was GBP 14.6 m (H1 2022:
GBP7.7m) reflecting investment in capacity expansion in our North
American HIP business.
Financial overview
Half year to Half year to
30 June 2023 30 June 2022
GBPm GBPm
-------------------------------------------- ------------- -------------
Revenue 420.1 358.5
Headline operating profit 62.8 50.5
Amortisation of acquired intangible assets (4.1) (4.8)
Acquisition costs - (0.7)
Exceptional items - -
-------------------------------------------- -------------
Operating profit 58.7 45.0
Net finance charge (3.5) (3.4)
-------------------------------------------- ------------- -------------
Profit before taxation 55.2 41.6
Taxation charge (12.3) (9.1)
-------------
Profit for the period 42.9 32.5
-------------------------------------------- ------------- -------------
Group revenue in the first half of 2023 was GBP420.1m, an
increase of 17.2 % at actual rates, 13.8 % at constant currency.
Headline operating profit for the six months increased by 24% to
GBP 62.8 m (H1 2022: GBP50.5m) and was up 23% at constant currency,
resulting in an increase in the headline operating margin to 15.0%
(H1 2022: 14.1%). Cost inflation has been recovered through a
combination of energy surcharges and underlying price increases.
The Group maintains a strong focus on cost control and operational
efficiency. Statutory operating profit rose to GBP58.7m (H1 2022:
GBP45.0m).
Finance charge
The net finance charge was GBP3.5m (H1 2022: GBP3.4m),
reflecting increased interest rates, analysed as follows:
Half year to Half year to
30 June 2023 30 June 2022
GBPm GBPm
--------------------------------------- ------------- -------------
Interest on loans and bank overdrafts (1.5) (0.8)
Lease and other interest charges (1.4) (1.5)
Finance and bank charges (1.1) (1.2)
--------------------------------------- ------------- -------------
Total finance charges (4.0) (3.5)
Interest received 0.5 0.1
--------------------------------------- ------------- -------------
Net finance charge (3.5) (3.4)
--------------------------------------- ------------- -------------
The Group's GBP250.9m Revolving Credit Facility which expires in
May 2027 was drawn by GBP 52.4 m as at 30 June 2023 (30 June 2022:
GBP90.8m) leaving Facility headroom of GBP 198.5 m (30 June 2022:
GBP160.1m).
Taxation
The headline tax charge was GBP13.4m (H1 2022: GBP10.4m). The
headline tax rate, being stated before accounting for amortisation
of acquired intangibles, acquisition costs and exceptional items,
was 22.5% (H1 2022: 22.2%).
The statutory tax charge in the first half of 2023 was GBP12.3m
compared with a tax charge of GBP9.1m for the same period in 2022.
The effective statutory tax rate was 22.3% (H1 2022: 21.9%).
Earnings per share
Basic headline earnings per share for the half year of 23.8p (H1
2022: 19.1p) was up 24.6% in line with the increase in headline
operating profit. Basic earnings per share on a statutory basis was
22.2p (H1 2022: 16.9p). Fully diluted earnings were not materially
different from basic earnings in either year.
Cash flow
Half year to Half year to Year ended
30 June 2023 30 June 2022 31 Dec 2022
GBPm GBPm GBPm
----------------------------------------------------------- ------------- ------------- ------------
Headline operating profit 62.8 50.5 112.2
Depreciation and amortisation 37.2 36.6 74.9
Other, including impairment and profit on disposal of PPE (1.0) (0.5) 3.0
----------------------------------------------------------- ------------- ------------- ------------
Headline EBITDA 99.0 86.6 190.1
Net maintenance capital expenditure (28.4) (24.5) (52.2)
Net working capital movement (8.5) (18.1) (25.3)
----------------------------------------------------------- ------------- ------------- ------------
Headline operating cash flow 62.1 44.0 112.6
Restructuring costs (1.0) (4.3) (7.4)
Finance costs, net (3.3) (2.6) (5.8)
Tax (1.6) (5.3) (15.4)
----------------------------------------------------------- ------------- ------------- ------------
Free cash flow 56.2 31.8 84.0
Expansionary capital expenditure (12.4) (7.2) (22.1)
Acquisition spend - (0.7) (0.9)
Ordinary dividend (28.5) (26.3) (38.5)
Own shares purchased less SBP and others (7.9) 2.9 1.7
----------------------------------------------------------- ------------- ------------- ------------
Decrease in net debt 7.4 0.5 24.2
Opening net debt (99.4) (116.3) (116.4)
Foreign exchange movements 3.2 (5.8) (7.2)
----------------------------------------------------------- ------------- ------------- ------------
Closing net debt (88.8) (121.6) (99.4)
----------------------------------------------------------- ------------- ------------- ------------
Lease liabilities 62.2 64.1 66.0
Net debt excluding lease liabilities (26.6) (57.5) (33.4)
----------------------------------------------------------- ------------- ------------- ------------
The Group's cash generation increased in the first half.
Headline operating cash flow increased to GBP62.1m (H1 2022:
GBP44.0m) with an improvement in headline operating cash flow
conversion to 99% compared to 87% for the same period last year.
The statutory measure, net cash from operating activities, was
GBP92.5m (H1 2022: GBP61.0m).
Free cash flow in the period was GBP56.2m (H1 2022: GBP31.8m)
with a free cash flow conversion of 90% compared to 63% for H1
2022. Net tax payments in the first half were GBP1.6m (H1 2022:
GBP5.3m) with the reduction reflecting the receipt of tax refunds
relating to prior years.
Net debt, excluding lease liabilities, improved by GBP6.8m at 30
June 2023 to GBP 26.6 m after GBP12.4m of investment in
expansionary capital expenditure, paying GBP 28.5 m of dividends to
shareholders and GBP12.2m for the purchase of 1.85 million shares
into our Employee Benefit Trust to satisfy future share-based
payments under the Group's share incentive schemes. This purchase
programme was completed subsequent to 30 June 2023 with a total of
2 million shares being purchased at an average price of GBP6.61 per
share.
Principal risks and uncertainties
The Group has processes in place to identify, evaluate and
mitigate the principal risks that could have an impact on the
Group's performance. The Directors have reviewed the principal
risks and uncertainties of the Group and consider that the
principal risks and uncertainties of the Group published in the
Annual Report for the year ended 31 December 2022 remain
appropriate. Further details of these principal risks and
associated risk management processes, including financial risks,
can be found on pages 28-32 and 122-124 of the 2022 Annual Report,
which is available at www.bodycote.com .
The principal risks referred to and which could have a material
impact on the Group's performance for the remainder of the current
financial year relate to:
-- Markets;
-- Competitor action;
-- Safety and health;
-- Climate change;
-- Service quality;
-- Contract review;
-- Loss of key accreditations;
-- Major disruption at a facility;
-- Machine downtime;
-- Information technology and cybersecurity; and
-- Regulatory and legislative compliance.
Going concern
As described in the condensed consolidated interim financial
statements, the Directors have formed a judgement, at the time of
approving the condensed consolidated financial statements, that
there are no material uncertainties that cast doubt on the Group's
going concern status and that it is a reasonable expectation that
the Group has adequate resources to continue in operational
existence for at least the next 12 months. In making this judgement
they have considered the potential impact of severe but plausible
downside risks related to the Group's activities.
For this reason, the Directors continue to adopt the going
concern basis in preparing the condensed consolidated financial
statements.
Responsibility statement
We confirm to the best of our knowledge that:
(a) the condensed consolidated set of financial statements has
been prepared in accordance with UK adopted IAS 34 Interim
Financial Reporting;
(b) the Interim results includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
(c) the Interim results include a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions
and changes therein).
By order of the Board,
S.C. Harris B. Fidler
Group Chief Executive Financial Officer
27 July 2023 27 July 2023
Cautionary statement
These Interim results have been prepared solely to provide
additional information to shareholders to assess the Group's
strategies and the potential for those strategies to succeed. The
Interim results should not be relied on by any other party or for
any other purpose.
These Interim results contain certain forward-looking
statements. These statements are made by the Directors in good
faith based on the information available to them up to the time of
their approval of this report and such statements should be treated
with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying any such
forward-looking information.
Independent review report to Bodycote plc
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Bodycote plc's condensed consolidated interim
financial statements (the "interim financial statements") in the
Interim results 2023 of Bodycote plc for the 6 month period ended
30 June 2023 (the "period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
The interim financial statements comprise:
-- the unaudited condensed consolidated balance sheet as at 30 June 2023;
-- the unaudited condensed consolidated income statement and the
unaudited condensed consolidated statement of comprehensive income
for the period then ended;
-- the unaudited condensed consolidated cash flow statement for the period then ended;
-- the unaudited condensed consolidated statement of changes in
equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the Interim results
2023 of Bodycote plc have been prepared in accordance with UK
adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity' issued by the Financial Reporting Council for use in the
United Kingdom ("ISRE (UK) 2410"). A review of interim financial
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the Interim
results 2023 and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on
the review procedures performed in accordance with ISRE (UK) 2410.
However, future events or conditions may cause the group to cease
to continue as a going concern.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The Interim results 2023, including the interim financial
statements, is the responsibility of, and has been approved by the
directors. The directors are responsible for preparing the Interim
results 2023 in accordance with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. In preparing the Interim results 2023, including
the interim financial statements, the directors are responsible for
assessing the group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the group or to cease operations, or
have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim
financial statements in the Interim results 2023 based on our
review. Our conclusion, including our Conclusions relating to going
concern, is based on procedures that are less extensive than audit
procedures, as described in the Basis for conclusion paragraph of
this report. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other
purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
27 July 2023
Unaudited condensed consolidated income statement
Year ended Half Half year
year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm Note GBPm GBPm
743.6 Revenue 1 420.1 358.5
Cost of sales and overheads excluding
(646.2) exceptional items (1) (367.5) (314.5)
Other operating income excluding
9.2 exceptional items(1) 6.5 1.9
Other operating expenses excluding
(4.5) exceptional items(1) (0.2) (0.3)
Net impairment losses on financial
(0.1) assets (0.2) (0.6)
Operating profit prior to exceptional
102.0 items 1 58.7 45.0
- Exceptional items 2 - -
102.0 Operating profit 58.7 45.0
0.4 Finance income 0.5 0.1
(7.1) Finance charge (4.0) (3.5)
95.3 Profit before taxation 55.2 41.6
(21.0) Taxation charge 3 (12.3) (9.1)
----------- --------- ----------
74.3 Profit for the period 42.9 32.5
----------- -------------------------------------- ----- --------- ----------
Attributable to:
73.7 Equity holders of the parent 42.3 32.2
0.6 Non-controlling interests 0.6 0.3
----------- --------- ----------
74.3 42.9 32.5
----------- -------------------------------------- ----- --------- ----------
Earnings per share 5
Pence Pence Pence
38.6 Basic 22.2 16.9
38.5 Diluted 22.1 16.9
----------- -------------------------------------- ----- --------- ----------
1 Consistent with the approach taken in the consolidated
financial statements for the year ended 31 December 2022, t he
condensed consolidated income statement for the half year to 30
June 2023 has been represented to present the gross balances for
other operating income and other operating expenses as separate
line items. These balances were not material in the period ended 30
June 2022 and were previously presented within cost of sales and
overheads excluding exceptional items.
All activities have arisen from continuing operations.
Unaudited condensed consolidated statement of comprehensive
income
Year ended Half Half year
year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm Note GBPm GBPm
74.3 Profit for the period 42.9 32.5
Items that will not be reclassified
to profit or loss:
Actuarial gains on defined benefit
5.8 pension schemes 0.1 0.1
(0.2) Tax on items that will not be reclassified - -
Total items that will not be reclassified
5.6 to profit or loss 0.1 0.1
Items that may be reclassified subsequently
to profit or loss:
Exchange (losses)/gains on translation
57.2 of overseas operations (34.9) 47.3
(3.1) Movements on hedges of net investments 7 1.9 (2.9)
(0.3) Movements on cash flow hedges 0.3 -
Total items that may be reclassified
53.8 subsequently to profit or loss (32.7) 44.4
Other comprehensive (expense)/income
59.4 for the period (32.6) 44.5
Total comprehensive income for the
133.7 period 10.3 77.0
----------- -------------------------------------------- ----- --------- ----------
Attributable to:
133.3 Equity holders of the parent 10.2 76.8
0.4 Non-controlling interests 0.1 0.2
133.7 10.3 77.0
----------- -------------------------------------------- ----- --------- ----------
Unaudited condensed consolidated balance sheet
As at As at As at
31 Dec 30 June 30 June
2022 2023 2022
GBPm Note GBPm GBPm
Non-current assets
227.8 Goodwill 6 220.9 225.7
116.9 Other intangible assets 111.5 116.2
516.3 Property, plant and equipment 495.0 510.2
59.6 Right-of-use assets 56.6 57.3
1.5 Deferred tax assets 2.0 2.4
1.5 Trade and other receivables 1.2 1.3
-------- -------- --------
923.6 887.2 913.1
-------- -------------------------------------- ----- -------- --------
Current assets
27.8 Inventories 28.4 24.8
24.4 Current tax assets 16.2 20.2
154.4 Trade and other receivables 163.5 151.5
37.2 Cash and bank balances 25.9 36.2
0.3 Assets held for sale - 0.3
-------- --------
244.1 234.0 233.0
-------- -------------------------------------- ----- -------- --------
1,167.7 Total assets 1121.2 1,146.1
-------- -------------------------------------- ----- -------- --------
Current liabilities
124.9 Trade and other payables 127.2 128.9
42.8 Current tax liabilities 46.0 36.7
70.6 Borrowings 52.5 93.7
12.3 Lease liabilities 11.7 12.7
0.3 Derivative financial instruments 7 - -
10.2 Provisions 9.6 10.2
-------- -------- --------
261.1 247.0 282.2
-------- -------------------------------------- ----- -------- --------
(17.0) Net current liabilities (13.0) (49.2)
-------- -------------------------------------- ----- -------- --------
Non-current liabilities
53.7 Lease liabilities 50.5 51.4
10.9 Retirement benefit obligations 10.6 14.3
51.0 Deferred tax liabilities 48.7 50.3
7.9 Provisions 7.4 8.1
1.1 Other payables 1.0 1.1
-------- -------- --------
124.6 118.2 125.2
385.7 Total liabilities 375.8 407.4
782.0 Net assets 756.0 738.7
-------- -------------------------------------- ----- -------- --------
Equity
33.1 Share capital 33.1 33.1
177.1 Share premium account 177.1 177.1
(5.2) Own shares (14.7) (5.2)
134.9 Other reserves 139.3 136.5
81.2 Translation reserves 46.8 71.2
359.8 Retained earnings 373.2 325.1
-------- -------- --------
Equity attributable to equity holders
780.9 of the parent 754.8 737.8
1.1 Non-controlling interests 1.2 0.9
-------- -------- --------
782.0 Total equity 756.0 738.7
-------- -------------------------------------- ----- -------- --------
Unaudited condensed consolidated cash flow statement
Year ended Half Half year
year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm Note GBPm GBPm
142.9 Net cash from operating activities 8 92.5 61.0
----------- ------------------------------------------ ----- --------- ----------
Investing activities
Purchases of property, plant and
(57.2) equipment (34.9) (24.5)
Proceeds on disposal of property,
plant and equipment and intangible
4.7 assets 3.9 1.9
(9.8) Purchases of other intangibles assets (4.2) (5.3)
0.4 Interest received 0.5 0.1
(61.9) Net cash used in investing activities (34.7) (27.8)
----------- ------------------------------------------ ----- --------- ----------
Financing activities
(6.2) Interest paid (3.7) (2.7)
(38.5) Dividends paid 4 (28.5) (26.3)
(13.8) Principal elements of lease payments (6.7) (6.9)
50.7 Drawdown of bank loans 5.2 17.0
(75.0) Repayments of bank loans (20.6) (19.0)
- Own shares purchased (12.2) -
(82.8) Net cash used in financing activities (66.5) (37.9)
----------- ------------------------------------------ ----- --------- ----------
(1.8) Net decrease in cash and cash equivalents (8.7) (4.7)
Cash and cash equivalents at beginning
37.9 of year 36.2 37.9
0.1 Effect of foreign exchange rate changes (1.7) 0.1
----------- --------- ----------
Cash and cash equivalents at end
36.2 of the period 8 25.8 33.3
----------- ------------------------------------------ ----- --------- ----------
Unaudited condensed consolidated statement of changes in
equity
Equity
attributable
to equity
Share holders
Share premium Own Other Translation Retained of the Non-controlling Total
capital account shares reserves reserves earnings parent interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
1 January 2023 33.1 177.1 (5.2) 134.9 81.2 359.8 780.9 1.1 782.0
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
Profit for the
period - - - - - 42.3 42.3 0.6 42.9
Exchange
differences
on translation
of overseas
operations - - - - (34.4) - (34.4) (0.5) (34.9)
Movements on
hedges
of net
investments - - - 1.9 - - 1.9 - 1.9
Movements on
cash
flow hedges - - - 0.3 - - 0.3 - 0.3
Actuarial gains
on defined
benefit
pension schemes
net of deferred
tax - - - - - 0.1 0.1 - 0.1
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
Total
comprehensive
income for the
period - - - 2.2 (34.4) 42.4 10.2 0.1 10.3
Acquired in the
year/settlement
of share
options - - (9.5) (2.1) - (0.6) (12.2) - (12.2)
Share-based
payments - - - 4.3 - - 4.3 - 4.3
Deferred tax on
share-based
payment
transactions - - - - - 0.1 0.1 - 0.1
Dividends - - - - - (28.5) (28.5) - (28.5)
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
30 June 2023 33.1 177.1 (14.7) 139.3 46.8 373.2 754.8 1.2 756.0
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
1 January 2022 33.1 177.1 (6.2) 137.5 23.8 319.4 684.7 0.7 685.4
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
Profit for the
period - - - - - 32.2 32.2 0.3 32.5
Exchange
differences
on translation
of overseas
operations - - - - 47.4 - 47.4 (0.1) 47.3
Movements on
hedges
of net
investments - - - (2.9) - - (2.9) - (2.9)
Actuarial gains
on defined
benefit
pension schemes
net of deferred
tax - - - - - 0.1 0.1 - 0.1
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
Total
comprehensive
income for the
period - - - (2.9) 47.4 32.3 76.8 0.2 77.0
Acquired in the
year/settlement
of share
options - - 1.0 (1.0) - (0.2) (0.2) - (0.2)
Share-based
payments - - - 2.9 - - 2.9 - 2.9
Deferred tax on
share-based
payment
transactions - - - - - (0.1) (0.1) - (0.1)
Dividends - - - - - (26.3) (26.3) - (26.3)
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
30 June 2022 33.1 177.1 (5.2) 136.5 71.2 325.1 737.8 0.9 738.7
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
Equity
attributable
to equity
Share holders
Share premium Own Other Translation Retained of the Non-controlling Total
capital account shares reserves reserves earnings parent interests equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
1 January 2022 33.1 177.1 (6.2) 137.5 23.8 319.4 684.7 0.7 685.4
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
Profit for the
year - - - - - 73.7 73.7 0.6 74.3
Exchange
differences
on translation
of overseas
operations - - - - 57.4 - 57.4 (0.2) 57.2
Movements on
hedges
of net
investments - - - (3.1) - - (3.1) - (3.1)
Movements on
cash
flow hedges - - - (0.3) - (0.3) - (0.3)
Actuarial gains
on defined
benefit
pension schemes
net of deferred
tax - - - - - 5.6 5.6 - 5.6
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
Total
comprehensive
income for the
year - - - (3.4) 57.4 79.3 133.3 0.4 133.7
Acquired in the
year/settlement
of share
options - - 1.0 (0.9) - (0.1) - - -
Share-based
payments - - - 1.7 - - 1.7 - 1.7
Deferred tax on
share-based
payment
transactions - - - - - (0.3) (0.3) - (0.3)
Dividends - - - - - (38.5) (38.5) - (38.5)
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
31 December 2022 33.1 177.1 (5.2) 134.9 81.2 359.8 780.9 1.1 782.0
----------------- -------- -------- ------- --------- ------------ --------- ------------- ---------------- -------
Included in other reserves is a capital redemption reserve of
GBP129.8m (31 December 2022: GBP129.8m; 30 June 2022 GBP129.8m) and
a share-based payments reserve of GBP8.9m (31 December 2022:
GBP6.7m; 30 June 2022: GBP7.9m). The capital redemption reserve
arose from B shares which were converted into deferred shares in
2008 and 2009, and as a result, GBP129.8m was transferred from
retained earnings to a capital redemption reserve.
The own shares reserve represents the cost of shares in Bodycote
plc purchased in the market. At 30 June 2023, 2,148,679 (31
December 2022: 639,125; 30 June 2022: 642,544) ordinary shares of
17 3/11p each were held by the Bodycote International Employee
Benefit Trust to satisfy share-based payments under the Group's
incentive schemes. In the period ended 30 June 2023, 1.85m shares
were purchased for the Bodycote International Employee Benefit
Trust at a cost of GBP12.2m.
Notes to the condensed consolidated financial information
Accounting policies
Basis of preparation
These condensed consolidated financial statements for the half
year ended 30 June 2023 have been prepared in accordance with the
UK adopted International Accounting Standards 34, 'Interim
financial reporting' and the Disclosure Guidance and Transparency
Rules sourcebook of the UK's Financial Conduct Authority (FCA).
The Group has adopted Standards and Interpretations issued by
the IASB and the International Financial Reporting Interpretations
Committee of the IASB (IFRS IC). Individual standards and
interpretations have to be adopted by the UK Endorsement Board
(UKEB) before being applied in the UK. International Financial
Reporting Standards (IFRS) are subject to ongoing amendment by the
IASB and subsequent endorsement by the UKEB and are therefore
subject to change.
These condensed consolidated financial statements should be read
in conjunction with the consolidated financial statements for the
year ended 31 December 2022, which were prepared in accordance with
UK adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies
reporting under these standards.
The financial information does not constitute statutory accounts
as defined by section 434 of the UK Companies Act 2006. A copy of
the statutory accounts for the year ended 31 December 2022 has been
delivered to the Registrar of Companies. The auditors have reported
on those accounts; their reports were (i) unqualified and (ii) did
not contain a statement under section 498 (2) or (3) of the UK
Companies Act 2006. These interim financial statements have been
reviewed, not audited.
The Group is not significantly affected by timing differences in
its operations. As such, seasonality has had no material impact on
the preparation of these condensed consolidated financial
statements and notes.
Going concern
In determining the basis of preparation for the condensed
consolidated financial statements, the Directors have considered
the Group's business activities, together with the factors likely
to affect its future development, performance and position. The
Financial overview included in this Interim Report includes a
summary of the Group's financial position, cash flows, liquidity
position and borrowings.
The current and plausible impact of macro-economic factors,
including the war in Ukraine, energy and price inflation, economic
growth and global supply chain impacts on the Group's activities,
performance and revenue, in addition to other factors and risks,
have been considered by the Directors in preparing its going
concern assessment. The Group has modelled a base case, which
reflects the Directors' current expectations of future trading in
addition to potential severe but plausible impacts on revenues,
profits and cash flows in a downside scenario.
Management's base case scenario is built upon the forecasting
processes for 2023 and extended up to December 2024. This model
shows an improvement in performance in both revenue and profits
compared to 2022. The Group's record of cash conversion was used to
estimate the cash generation and level of net debt over that
period. The severe but plausible downside scenario assumes a
significant decline in revenues of around 19% below the base case
modelled through to the end of December 2024, and would result in
H2 2023 sales 15% below H1 2023 levels.
In performing the scenarios, the assessment has considered both
liquidity and compliance with the Group's covenants. The key
covenants attached to the Group's Revolving Credit Facility relate
to financial gearing (net debt to EBITDA) and interest cover, which
are measured on a pre-IFRS 16 basis. The maximum financial gearing
ratio permitted under the covenants is 3.0x (with a one-time
acquisition spike at 3.5x) and the minimum interest cover ratio
permitted is 4.0x. In both the base case and the severe but
plausible downside scenario modelled, the Group continues to
maintain sufficient liquidity and meets its gearing and interest
cover covenants under the Revolving Credit Facility with
substantial headroom.
Management also performed a reverse stress test. This indicated
that H2 2023 revenues would need to decline by approximately 40%
compared to H1 2023 levels, with no growth in FY24, before the
Group's loan covenants were breached at the December 2024 test
date. In this scenario minimum liquidity was over GBP136m
throughout the entire period. This scenario included the benefit of
a reduction in capital expenditure and dividends, but no further
mitigating actions, such as restructuring of the cost base.
The Group meets its working capital requirements through a
combination of committed and uncommitted facilities and overdrafts.
For the purposes of the going concern assessment, the Directors
have only taken into account the capacity under existing committed
facilities, being predominantly the Group's Revolving Credit
Facility.
The Group has access to a GBP250.9m Revolving Credit Facility
maturing in May 2027. The Group's committed facilities at 30 June
2023 totalled GBP255.4m while uncommitted facilities totalled
GBP50.9m. At 30 June 2023, the Group's Revolving Credit Facility
had drawings of GBP52.4m (31 December 2022: GBP69.6m) and the
Group's net debt was GBP26.6m (31 December 2022: GBP33.4m). The
liquidity headroom was GBP228.8m at 30 June 2023 (31 December 2022:
GBP222.0m), excluding uncommitted facilities.
Following this assessment, the Directors have formed a
judgement, at the time of approving the financial statements, that
there are no material uncertainties that cast doubt on the Group's
going concern status and that it is a reasonable expectation that
the Group has adequate resources to continue in operational
existence for at least the next 12 months from the approval date of
the condensed consolidated financial statements. For this reason,
the Directors continue to adopt the going concern basis in
preparing the condensed consolidated financial statements.
Changes in accounting policies
The same accounting policies, presentation and methods of
computation are followed in the condensed consolidated financial
statements as applied in the Group's latest annual audited
financial statements, except as set out below.
In determining the tax charge for the interim period under IAS
34, the Group has applied the forecast annual effective corporate
income tax rate to the pre-tax income for the six month period.
The Group's latest annual audited financial statements set out
the key sources of estimation uncertainty and the critical
judgements that were made in preparing those financial statements.
These related to the assumptions used to account for retirement
benefit schemes under IAS 19 (revised), the decision to not
recognise an asset in relation to the surplus on the UK defined
benefit pension scheme and the recognition of tax provisions. There
have been no changes to these key sources of estimation uncertainty
or these critical judgements since year end. The economy in Turkey
remains subject to high inflation and the Group has concluded that
applying IAS 29 (Financial Reporting in Hyperinflationary
Economies) is not required as the impact of adopting this standard
is not material but will continue to assess the position going
forward.
Climate change is referred to in the Principal risks and
uncertainties and Sustainability sections of the Strategic report
and within other areas of judgement and accounting estimates in the
consolidated financial statements within the Annual Report for the
year ended 31 December 2022 and the Group's view is that climate
change does not create any further material estimation uncertainty
at this time.
New standards and interpretations not yet applied
At the date of the approval of these condensed consolidated
financial statements, there were no new or revised IFRSs,
amendments or interpretations in issue but not yet effective that
are potentially material to the Group and which have not yet been
applied.
1. Business and geographical segments
The Group has more than 165 facilities across the world serving
a range of market sectors with various thermal processing services.
The range and type of services offered is common to all market
sectors.
In accordance with IFRS 8 Operating Segments, the segmentation
of Group activity reflects the way the Group is managed by the
chief operating decision maker, being the Group Chief Executive,
who regularly reviews the operating performance of six operating
segments, split between the Aerospace, Defence & Energy (ADE)
and Automotive & General Industrial (AGI) business areas, as
follows:
-- ADE - Western Europe;
-- ADE - North America;
-- ADE - Emerging Markets;
-- AGI - Western Europe;
-- AGI - North America; and
-- AGI - Emerging Markets.
The split of operating segments by geography reflects the
business reporting structure of the Group.
We have also presented combined results of our two key business
areas, ADE and AGI. The split being driven by customer behaviour
and requirements, geography and services provided. Customers in the
ADE segment tend to operate and purchase more globally and have
long supply chains, whilst customers in the AGI segment tend to
purchase more locally and have shorter supply chains.
Bodycote plants do not exclusively supply services to customers
of a given market sector. Allocations of plants between ADE and AGI
is therefore derived by reference to the preponderance of markets
served.
Half year to
30 June 2023
-------- ------------------------ -------------
Central
costs and
ADE AGI eliminations Consolidated
30 June 30 June 30 June 30 June
2023 2023 2023 2023
Group GBPm GBPm GBPm GBPm
------------------------------------- -------- -------- -------------- -------------
Revenue
Total revenue 180.5 239.6 - 420.1
------------------------------------- -------- -------- -------------- -------------
Result
Headline operating profit(1)
prior to share-based payments
and unallocated central costs 33.1 45.6 - 78.7
Share-based payments (including
social charges)(2) (0.9) (1.9) (2.4) (5.2)
Unallocated central costs - - (10.7) (10.7)
------------------------------------- -------- -------- -------------- -------------
Headline operating profit/(loss) 32.2 43.7 (13.1) 62.8
Amortisation of acquired intangible
assets (3.3) (0.8) - (4.1)
Acquisition costs - - - -
------------------------------------- -------- -------- -------------- -------------
Operating profit/(loss) prior
to exceptional items 28.9 42.9 (13.1) 58.7
Exceptional items - - - -
------------------------------------- -------- -------- -------------- -------------
Segment result 28.9 42.9 (13.1) 58.7
Finance income 0.5
Finance charge (4.0)
------------------------------------- -------- -------- -------------- -------------
Profit before taxation 55.2
Taxation (12.3)
------------------------------------- -------- -------- -------------- -------------
Profit for the period 42.9
------------------------------------- -------- -------- -------------- -------------
1 Headline operating profit is an alternative performance
measure and is defined in the APM section.
2 GBP4.3m (31 December 2022: GBP1.7m; 30 June 2022: GBP2.9m)
IFRS 2 share-based payment charge in the period/year plus GBP0.9m
charge (31 December 2022: GBP0.1m credit; 30 June 2022 GBP0.2m
credit) for social security.
Inter-segment sales are not material in the period.
The Group does not have any one customer that contributes more
than 10% of revenue.
Half year to 30 June 2023
----------------------------------------
Western North Emerging Total
Europe America markets ADE
30 June 30 June 30 June 30 June
2023 2023 2023 2023
Aerospace, Defence & Energy GBPm GBPm GBPm GBPm
------------------------------------- -------- --------- --------- --------
Revenue
Total revenue 84.6 92.3 3.6 180.5
------------------------------------- -------- --------- --------- --------
Result
Headline operating profit prior
to share-based payments 18.4 14.8 (0.1) 33.1
Share-based payments (including
social charges) (0.3) (0.6) - (0.9)
------------------------------------- -------- --------- --------- --------
Headline operating profit/(loss) 18.1 14.2 (0.1) 32.2
Amortisation of acquired intangible
assets (0.2) (3.1) - (3.3)
------------------------------------- -------- --------- --------- --------
Segment result 17.9 11.1 (0.1) 28.9
------------------------------------- -------- --------- --------- --------
Half year to 30 June 2023
----------------------------------------
Western North Emerging Total
Europe America markets AGI
30 June 30 June 30 June 30 June
2023 2023 2023 2023
Automotive & General Industrial GBPm GBPm GBPm GBPm
------------------------------------- -------- --------- --------- --------
Revenue
Total revenue 136.5 54.2 48.9 239.6
------------------------------------- -------- --------- --------- --------
Result
Headline operating profit prior
to share-based payments 29.7 5.5 10.4 45.6
Share-based payments (including
social charges) (1.4) (0.4) (0.1) (1.9)
------------------------------------- -------- --------- --------- --------
Headline operating profit 28.3 5.1 10.3 43.7
Amortisation of acquired intangible
assets (0.2) (0.4) (0.2) (0.8)
------------------------------------- -------- --------- --------- --------
Segment result 28.1 4.7 10.1 42.9
------------------------------------- -------- --------- --------- --------
Half year to 30 June 2022
-------------------------------------------------
Central
costs and
ADE AGI eliminations Consolidated
30 June 30 June 30 June 30 June
2022 2022 2022 2022
Group GBPm GBPm GBPm GBPm
------------------------------------------ -------- -------- -------------- -------------
Revenue
Total revenue 148.9 209.6 - 358.5
------------------------------------------ -------- -------- -------------- -------------
Result
Headline operating profit prior
to share-based payments and unallocated
central costs 24.2 35.8 - 60.0
Share-based payments (including
social charges) (0.9) (0.8) (1.0) (2.7)
Unallocated central costs - - (6.8) (6.8)
------------------------------------------ -------- -------- -------------- -------------
Headline operating profit/(loss) 23.3 35.0 (7.8) 50.5
Amortisation of acquired intangible
assets (3.4) (1.4) - (4.8)
Acquisition costs - - (0.7) (0.7)
------------------------------------------ -------- -------- -------------- -------------
Operating profit/(loss) prior
to exceptional items 19.9 33.6 (8.5) 45.0
Exceptional items (0.3) 0.1 0.2 -
------------------------------------------ -------- -------- -------------- -------------
Segment result 19.6 33.7 (8.3) 45.0
Finance income 0.1
Finance costs (3.5)
------------------------------------------ -------- -------- -------------- -------------
Profit before taxation 41.6
Taxation (9.1)
------------------------------------------ -------- -------- -------------- -------------
Profit for the period 32.5
------------------------------------------ -------- -------- -------------- -------------
Half year to 30 June 2022
----------------------------------------
Western North Emerging Total
Europe America markets ADE
30 June 30 June 30 June 30 June
2022 2022 2022 2022
Aerospace, Defence & Energy GBPm GBPm GBPm GBPm
--------------------------------------- -------- --------- --------- --------
Revenue
Total revenue 65.7 79.9 3.3 148.9
--------------------------------------- -------- --------- --------- --------
Result
Headline operating profit prior
to share-based payments 10.8 13.3 0.1 24.2
Share-based payments (including
social charges) (0.1) (0.8) - (0.9)
--------------------------------------- -------- --------- --------- --------
Headline operating profit 10.7 12.5 0.1 23.3
Amortisation of acquired intangible
assets (0.2) (3.2) - (3.4)
--------------------------------------- -------- --------- --------- --------
Operating profit prior to exceptional
items 10.5 9.3 0.1 19.9
Exceptional items 0.5 (0.8) - (0.3)
--------------------------------------- -------- --------- --------- --------
Segment result 11.0 8.5 0.1 19.6
--------------------------------------- -------- --------- --------- --------
Half year to 30 June 2022
----------------------------------------
Western North Emerging Total
Europe America markets AGI
30 June 30 June 30 June 30 June
2022 2022 2022 2022
Automotive & General Industrial GBPm GBPm GBPm GBPm
--------------------------------------- -------- --------- --------- --------
Revenue
Total revenue 119.9 49.5 40.2 209.6
--------------------------------------- -------- --------- --------- --------
Result
Headline operating profit prior
to share-based payments 24.5 3.7 7.6 35.8
Share-based payments (including
social charges) (0.4) (0.4) - (0.8)
--------------------------------------- -------- --------- --------- --------
Headline operating profit 24.1 3.3 7.6 35.0
Amortisation of acquired intangible
assets (0.2) (1.0) (0.2) (1.4)
--------------------------------------- -------- --------- --------- --------
Operating profit prior to exceptional
items 23.9 2.3 7.4 33.6
Exceptional items 0.2 (0.1) - 0.1
--------------------------------------- -------- --------- --------- --------
Segment result 24.1 2.2 7.4 33.7
--------------------------------------- -------- --------- --------- --------
Year ended 31 December 2022
-----------------------------------------------
Central
costs and
ADE AGI eliminations Consolidated
31 Dec 31 Dec
2022 2022 31 Dec 2022 31 Dec 2022
Group GBPm GBPm GBPm GBPm
------------------------------------------ ------- ------- -------------- -------------
Revenue
Total revenue 312.7 430.9 - 743.6
------------------------------------------ ------- ------- -------------- -------------
Result
Headline operating profit prior
to share-based payments and unallocated
central costs 52.1 81.1 - 133.2
Share-based payments (including
social charges) (1.3) (0.3) - (1.6)
Unallocated central costs - - (19.4) (19.4)
------------------------------------------ ------- ------- -------------- -------------
Headline operating profit/(loss) 50.8 80.8 (19.4) 112.2
Amortisation of acquired intangible
assets (6.9) (2.4) - (9.3)
Acquisition costs - - (0.9) (0.9)
------------------------------------------ ------- ------- -------------- -------------
Operating profit/(loss) prior
to exceptional items 43.9 78.4 (20.3) 102.0
Exceptional items 0.1 (0.2) 0.1 -
------------------------------------------ ------- ------- -------------- -------------
Segment result 44.0 78.2 (20.2) 102.0
Finance income 0.4
Finance costs (7.1)
------------------------------------------ ------- ------- -------------- -------------
Profit before taxation 95.3
Taxation (21.0)
------------------------------------------ ------- ------- -------------- -------------
Profit for the year 74.3
------------------------------------------ ------- ------- -------------- -------------
Year ended 31 December 2022
---------------------------------------
Western North Emerging Total
Europe America markets ADE
31 Dec 31 Dec 31 Dec 31 Dec
2022 2022 2022 2022
Aerospace, Defence & Energy GBPm GBPm GBPm GBPm
--------------------------------------- -------- --------- --------- -------
Revenue
Total revenue 137.1 168.6 7.0 312.7
--------------------------------------- -------- --------- --------- -------
Result
Headline operating profit prior
to share-based payments 24.5 27.4 0.2 52.1
Share-based payments (including
social charges) (0.4) (0.9) - (1.3)
--------------------------------------- -------- --------- --------- -------
Headline operating profit 24.1 26.5 0.2 50.8
Amortisation of acquired intangible
assets (0.4) (6.5) - (6.9)
--------------------------------------- -------- --------- --------- -------
Operating profit prior to exceptional
items 23.7 20.0 0.2 43.9
Exceptional items 0.7 (0.6) - 0.1
--------------------------------------- -------- --------- --------- -------
Segment result 24.4 19.4 0.2 44.0
--------------------------------------- -------- --------- --------- -------
Year ended 31 December 2022
---------------------------------------
Western North Emerging Total
Europe America markets AGI
31 Dec 31 Dec 31 Dec 31 Dec
2022 2022 2022 2022
Automotive & General Industrial GBPm GBPm GBPm GBPm
--------------------------------------- -------- --------- --------- -------
Revenue
Total revenue 241.6 103.0 86.3 430.9
--------------------------------------- -------- --------- --------- -------
Result
Headline operating profit prior
to share-based payments 51.6 12.1 17.4 81.1
Share-based payments (including
social charges) (0.6) 0.2 0.1 (0.3)
--------------------------------------- -------- --------- --------- -------
Headline operating profit 51.0 12.3 17.5 80.8
Amortisation of acquired intangible
assets (0.5) (1.5) (0.4) (2.4)
--------------------------------------- -------- --------- --------- -------
Operating profit prior to exceptional
items 50.5 10.8 17.1 78.4
Exceptional items 0.2 (0.3) (0.1) (0.2)
--------------------------------------- -------- --------- --------- -------
Segment result 50.7 10.5 17.0 78.2
--------------------------------------- -------- --------- --------- -------
2 . Exceptional items
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- ------------------------------------------- --------- ----------
(0.8) Severance and redundancy provision release - (0.5)
(0.1) Net impairment reversal - (0.4)
1.0 Site closure costs - 0.8
Losses on sales of property, plant and
equipment recognised in exceptional
0.1 items - 0.2
(0.2) Environmental provisions credit - (0.1)
----------- ------------------------------------------- --------- ----------
- Total exceptional items(1) - -
----------- ------------------------------------------- --------- ----------
1 Non-exceptional costs relating to severance and redundancy,
impairment charges and reversals, site closure costs and
environmental provisions are booked to other operating expenses.
Non-exceptional gains and losses on sales of property, plant and
equipment are booked to other operating income.
In 2020, the Group announced an organisation restructuring
initiative and a number of plants were closed as a result of these
restructuring activities. The related costs were recorded as
exceptional items in line with the Group's accounting policy for
exceptional items.
No exceptional items have been recorded for the period ended 30
June 2023.
As at 30 June 2023, GBP2.0m (31 December 2022 GBP3.0m; 30 June
2022 GBP6.2m) was held as exceptional provisions relating to the
exceptional restructuring initiative.
3. Taxation charge
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- ------------------------------------------ --------- ----------
21.3 Current taxation - charge for the period 12.8 10.4
(0.6) Current taxation - adjustments in respect - (1.0)
of previous years
0.3 Deferred tax (0.5) (0.3)
----------- ------------------------------------------ --------- ----------
21.0 Total taxation charge 12.3 9.1
----------- ------------------------------------------ --------- ----------
The headline rate of tax for the six months ended 30 June 2023
was 22.5% (31 December 2022: 22.3%; 30 June 2022: 22.2%) of the
headline operating profit before tax. The statutory effective tax
rate was 22.3% (31 December 2022: 22.1%; 30 June 2022: 21.9%).
On 20 June 2023, the Finance (No.2) Act 2023 was substantively
enacted in the UK, introducing a global minimum effective tax rate
of 15%. The legislation implements a domestic top-up tax and a
multinational top-up tax, effective for accounting periods starting
on or after 31 December 2023. The Group has applied the exception
under the proposed IAS 12 amendment related to recognising and
disclosing information about deferred tax assets and liabilities
for top-up income taxes. The Group is reviewing these rules to
assess any potential impacts.
4. Dividends
Amounts recognised as distributions to equity holders in the
period:
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- ------------------------------------- --------- ----------
Amounts recognised as distributions
to equity holders in the period:
Final dividend for the year ended 31
26.3 December 2021 of 13.8p per share - 26.3
12.2 Interim dividend for the year ended - -
31 December 2022 of 6.4p per share
- Final dividend for the year ended 31 28.5 -
December 2022 of 14.9p per share
38.5 28.5 26.3
----------- ------------------------------------- --------- ----------
Interim dividend for the year ended -
31 December 2023 of 6.7p per share
----------- ------------------------------------- --------- ----------
The Board approved the payment of an interim dividend for 2023
of 6.7p on 10 November 2023 which has not been included as a
liability in these condensed consolidated financial statements.
The dividends are waived on shares held by the Bodycote
International Employee Benefit Trust.
5. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
------------ -------------------------------------------- ------------ ------------
Earnings
Earnings for the purpose of basic earnings
per share being net profit attributable
73.7 to equity holders of the parent 42.3 32.2
------------ -------------------------------------------- ------------ ------------
Number Number Number
------------ -------------------------------------------- ------------ ------------
Number of shares
190,779,615 Weighted average number of ordinary 190,603,804 190,744,285
shares for the purpose of basic earnings
per share
------------ -------------------------------------------- ------------ ------------
Effect of dilutive potential ordinary
shares:
384,848 Shares subject to performance conditions(1) 278,130 7,647
191,502 Shares subject to vesting conditions 217,088 185,487
------------ -------------------------------------------- ------------ ------------
191,355,965 Weighted average number of ordinary 191,099,022 190,937,419
shares for the purpose of diluted earnings
per share
------------ -------------------------------------------- ------------ ------------
Pence Pence Pence
------ -------------------- ------ ------
Earnings per share:
38.6 Basic 22.2 16.9
------ -------------------- ------ ------
38.5 Diluted(1) 22.1 16.9
------ -------------------- ------ ------
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- ------------------------------------------ --------- ----------
Headline earnings
Net profit attributable to equity holders
73.7 of the parent 42.3 32.2
Add back:
Amortisation of acquired intangible
7.0 assets (net of tax) 3.1 3.6
0.7 Acquisition costs (net of tax) - 0.6
----------- ------------------------------------------ --------- ----------
81.4 Headline earnings 45.4 36.4
----------- ------------------------------------------ --------- ----------
Pence Pence Pence
----------- ------------------------------------------ --------- ----------
Headline earnings per share:
42.7 Basic 23.8 19.1
----------- ------------------------------------------ --------- ----------
42.5 Diluted(1) 23.7 19.1
----------- ------------------------------------------ --------- ----------
1 As at 30 June 2023, in accordance with IAS 33, the related
performance conditions for most open share-based payment plans have
not been met resulting in a 0.1p dilution of earnings per share (31
December 2022: 0.2p; 30 June 2022: nil). See the statement of
equity for more information on shares held by the Bodycote
International Employee Benefit Trust to satisfy share-based
payments.
6. Goodwill
As at As at As at
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
------- ---------------------------------------- -------- --------
Cost
274.5 At 1 January 288.9 274.5
14.1 Exchange differences (7.3) 12.3
0.3 Recognised on acquisition of businesses - -
288.9 Total cost 281.6 286.8
Accumulated impairment
60.6 At 1 January 61.1 60.6
0.5 Exchange differences (0.4) 0.5
61.1 Total accumulated impairment 60.7 61.1
227.8 Carrying amount 220.9 225.7
------- ---------------------------------------- -------- --------
Goodwill acquired through business combinations is allocated to
the cash generating units (CGUs) that are expected to benefit from
the synergies of the combination. The recoverable amounts of these
CGUs are the higher of fair value less costs to dispose and
value-in-use. Goodwill is allocated across the Group's segments as
follows:
As at As at As at
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
------- ------------------ -------- --------
ADE:
27.2 Western Europe 27.1 26.9
100.9 North America 97.3 100.2
AGI:
28.2 Western Europe 27.4 27.8
59.4 North America 57.1 59.1
12.1 Emerging markets 12.0 11.7
227.8 220.9 225.7
------- ------------------ -------- --------
In accordance with IAS 36, the Group tests goodwill at least
annually for impairment, and performs a trigger assessment at the
end of each reporting period to determine if there is any
indication of impairment, or more frequently if there are
indicators that goodwill might be impaired. The most recent
impairment test was performed as at 31 December 2022 and no
impairment was identified. For the six months ended 30 June 2023,
the Group has performed a trigger assessment to determine whether
impairment testing is required on any of its CGUs. This assessment
focused on a review of the year to date performance of each CGU
versus the budget, and then also considered the headroom as at 31
December 2022 to determine whether it was reasonably possible that
the performance of any CGU in the six months ended 30 June 2023
could result in an impairment if a full test was performed.
Following this review the Directors concluded that no impairment
triggers were identified and consequently no impairment testing is
required for the period 30 June 2023.
7. Financial Instruments
In accordance with IFRS 7 Financial Instruments Disclosures, t
he Group's derivative financial instruments are considered to be
classified as level 2 instruments. Fair value measurements are
those derived from inputs other than quoted prices included within
level 1 that are observable for the asset or liabilities, either
directly (i.e. as prices) or indirectly (i.e. derived from
prices).
There have been no transfers of assets or liabilities between
levels of the fair value hierarchy in the period ended 30 June
2023. The carrying values of financial instruments at amortised
cost as presented in the condensed consolidated financial
statements approximate their fair values.
The Group uses foreign currency forward contracts in the
management of its exchange rate exposures. The contracts are
primarily denominated in the currencies of the Group's principal
markets. The losses recognised in the condensed consolidated income
statement on the contracts which matured in 2023 amounted to GBPnil
(31 December 2022: GBP0.1m; 30 June 2022: GBPnil). The unrecognised
gains and losses were not material in either the period ended 30
June 2023 or 2022.
In accordance with IFRS 7 Financial Instruments Disclosures,
fair value is determined using quoted forward exchange rates and
yield curves derived from quoted interest rates matching maturities
of the contracts.
The Group's interest rate risk is primarily in relation to its
floating rate borrowings (cash flow risk). From time-to-time the
Group will use interest rate derivative contracts to manage its
exposure to interest rate movements within Group policy. At 30 June
2023 the Group's only recent interest rate swap, which was
classified as a level 2 instrument and measured at fair value had
matured (fair value at 31 December 2022: -GBP0.3m; 30 June 2022:
GBPnil).
The Group continues to draw on the Revolving Credit Facility
(RCF) as this was used to partly fund an acquisition in 2020 and
the related deferred consideration payments. The related loans are
denominated in GBP, USD and EUR. Certain EUR and USD amounts are
designated as net investment hedges to the Group's subsidiaries
with a matching functional currency on a 1:1 ratio.
The foreign exchange gain of GBP1.9m ( 31 December 2022: GBP3.1m
loss; 30 June 2022: GBP2.9m loss) on translation of borrowings to
GBP at the end of the reporting period is recognised in other
comprehensive income and accumulated in the foreign currency
translation reserve in shareholder's equity. There was no
ineffectiveness to be recorded from the net investment hedges.
8. Notes to the cash flow statement
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- ----------------------------------------------------- --------- ----------
74.3 Profit for the period 42.9 32.5
Adjustments for:
(0.4) Finance income (0.5) (0.1)
7.1 Finance charge 4.0 3.5
21.0 Taxation charge 12.3 9.1
102.0 Operating profit 58.7 45.0
Adjustments for:
Depreciation of property, plant and equipment
60.2 recognised in operating profit 29.9 29.3
13.0 Depreciation of right-of-use assets 6.4 6.5
11.1 Amortisation of other intangible assets 5.0 5.7
(1.7) Profit on disposal of property, plant and equipment (1.1) (0.6)
recognised in operating profit
0.1 Loss on disposal of property, plant and equipment - 0.2
recognised in exceptional items
(0.1) Profit on disposal of right-of-use assets - -
1.7 Share-based payments 4.3 2.9
(0.1) Impairment reversal of property, plant and - (0.4)
equipment and other assets
recognised in exceptional items
4.8 Impairment of property, plant and equipment 0.1 -
and other assets recognised in operating profit
191.0 EBITDA (See definition in APM section) 103.3 88.6
(8.5) Increase in inventories (0.6) (4.7)
(37.4) Increase in receivables (8.8) (27.4)
12.6 Increase in payables 5.1 11.2
(3.7) Decrease in provisions (1.1) (1.6)
154.0 Cash generated by operations 97.9 66.1
(15.4) Income taxes paid (1.6) (5.3)
0.8 Settlement of derivatives (0.3) 0.2
1.8 Refund of post settlement pension surplus - -
1.7 Net exchange differences (3.5) -
142.9 Net cash from operating activities 92.5 61.0
----------- ----------------------------------------------------- --------- ----------
As at As at As at
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
------- ----------------------------------------- -------- --------
Cash and cash equivalents comprise:
37.2 Cash and bank balances 25.9 36.2
(1.0) Bank overdrafts (included in borrowings) (0.1) (2.9)
------- ----------------------------------------- -------- --------
36.2 25.8 33.3
------- ----------------------------------------- -------- --------
The cash and cash equivalents disclosed above in the statement
of cash flows includes GBP0.8m (31 December 2022: GBP0.8m; 30 June
2022: GBPnil) held in escrow relating to environmental provisions
in the USA and GBP1.6m (31 December 2022: GBP1.8m; 30 June 2022:
GBPnil) held in the USA related to the refund of a pension surplus.
The Group intends to use this refund of pension surplus cash to
fund future pension contributions for its USA employees, otherwise
the full amount will become subject to regulatory restrictions in
the USA.
9. Related party transactions
Transactions between subsidiaries of the Group, which are
related parties to each other, have been eliminated on
consolidation and are not disclosed in this note. Information on
the remuneration of the Board of Directors, who are considered key
management personnel of the Group, is disclosed in note 26 to the
consolidated financial statements in the 2022 Annual Report.
10. Contingent liabilities
The Group is subject to certain legal proceedings, claims,
complaints and investigations arising out of the ordinary course of
business. Legal proceedings may include, but are not limited to,
alleged breach of contract and alleged breach of environmental,
competition, securities and health and safety laws. The Group may
not be insured fully, or at all, in respect of such risks. The
Group cannot predict the outcome of individual legal actions or
claims or complaints or investigations. The Group may settle
litigation or regulatory proceedings prior to a final judgement or
determination of liability. The Group may do so to avoid the cost,
management efforts or negative business, regulatory or reputational
consequences of continuing to contest liability, even when it
considers it has valid defences to liability. The Group considers
that no material loss is expected to result from these legal
proceedings, claims, complaints and investigations. Provision is
made for all liabilities that are expected to materialise through
legal and tax claims against the Group.
Alternative performance measures - APMs
Bodycote uses various APMs, in addition to those measures
reported under International Financial Reporting Standards (IFRS),
as management consider these measures enable users of the financial
statements to assess the headline trading performance of the
business. These APMs of financial performance, position or cash
flows are not defined or specified according to IFRS and are
defined below and, where relevant, are reconciled to IFRS measures.
APMs are prepared on a consistent basis for all periods presented
in this report.
The APMs used include headline operating profit, headline
operating margin, headline operating margin excluding surcharge
revenue, headline profit before taxation, EBITDA, headline EBITDA,
organic revenue, revenue excluding surcharges, headline tax charge,
headline tax rate, headline earnings per share (EPS), headline
operating cash flow, free cash flow, headline operating cash
conversion, free cash flow conversion, net debt, net debt excluding
lease liabilities and revenue and headline operating profit at
constant exchange rates. These measures reflect the headline
trading performance of the business as they exclude certain
non-operational items, exceptional items, acquisition costs and the
amortisation of acquired intangible assets. The Group also uses
revenue growth percentages adjusted for the impact of foreign
exchange movements, where appropriate, to better represent the
trading performance of the Group. The measures described above are
also used in the targeting process for executive and management
annual bonuses (headline operating profit and headline operating
cash flow) and executive share schemes (headline EPS).
The constant exchange rate comparison uses the current
period/year reported segmental information, stated in the relevant
functional currency, and translates the results into its
presentational currency using the prior period's monthly exchange
rates. Expansionary capital expenditure is defined as capital
expenditure invested to grow the Group's business.
Headline operating profit
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- -------------------------- --------- ----------
102.0 Operating profit 58.7 45.0
Add back:
Amortisation of acquired
9.3 intangibles 4.1 4.8
0.9 Acquisition costs - 0.7
- Exceptional items - -
112.2 Headline operating profit 62.8 50.5
----------- -------------------------- --------- ----------
Headline operating margin
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- -------------------------- --------- ----------
112.2 Headline operating profit 62.8 50.5
743.6 Revenue 420.1 358.5
15.1% Headline operating margin 15.0% 14.1%
----------- -------------------------- --------- ----------
Headline operating margin excluding surcharge revenue
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- ---------------------------------------------- --------- ----------
112.2 Headline operating profit 62.8 50.5
697.0 Revenue excluding surcharges 380.7 342.5
Headline operating margin excluding surcharge
16.1% revenue 16.5% 14.7%
----------- -------------------------------------------------- --------- ----------
Headline profit before taxation
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- ------------------------- --------- ----------
95.3 Profit before taxation 55.2 41.6
Add back:
Amortisation of acquired
9.3 intangibles 4.1 4.8
0.9 Acquisition costs - 0.7
- Exceptional items - -
Headline profit before
105.5 taxation 59.3 47.1
----------- ------------------------- --------- ----------
EBITDA and Headline EBITDA (Earnings Before Interest, Taxation,
Depreciation and Amortisation)
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- --------------------------------------------- --------- ----------
102.0 Operating profit 58.7 45.0
84.3 Depreciation and amortisation 41.3 41.5
Impairment reversal of property, plant
and equipment and other assets - recognised
(0.1) in exceptional items - (0.4)
4.8 Impairment of property, plant and equipment 0.1 -
and other assets - recognised in operating
profit
(1.7) Profit on disposal of property, plant (1.1) (0.6)
and equipment - recognised in operating
profit
(0.1) Profit on disposal of right-of-use assets - -
- recognised in operating profit
Loss on disposal of property, plant and
equipment - recognised in exceptional
0.1 items - 0.2
1.7 Share-based payments 4.3 2.9
191.0 EBITDA 103.3 88.6
0.9 Acquisition costs - 0.7
Exceptional items, excluding
(0.1) impairments - 0.2
(1.7) Share-based payments (4.3) (2.9)
190.1 Headline EBITDA 99.0 86.6
----------- --------------------------------------------- --------- ----------
25.6% Headline EBITDA margin 23.6% 24.2%
----------- --------------------------------------------- --------- ----------
Organic Revenue
Excludes revenues from acquisitions in the current and
comparative period to provide a like-for-like comparison:
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- ----------------------------------------------- --------- ----------
743.6 Total revenue 420.1 358.5
Less adjustments for revenue from acquisitions
(8.6) completed in the current or prior year - (4.8)
---------------------------------------------------
735.0 Total organic revenue 420.1 353.7
----------- ----------------------------------------------- --------- ----------
Revenue excluding surcharges
Half year Half year
Year ended to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- ------------------------ ---------- ----------
743.6 Total revenue 420.1 358.5
(46.6) Less energy surcharges (39.4) (16.0)
----------------------------
Total revenue excluding
697.0 surcharges 380.7 342.5
----------- ------------------------ ---------- ----------
Headline operating cash flow
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- ----------------------------- --------- ----------
190.1 Headline EBITDA 99.0 86.6
Less:
Net maintenance capital
(52.2) expenditure (28.4) (24.5)
(25.3) Net working capital movement (8.5) (18.1)
Headline operating cash
112.6 flow 62.1 44.0
----------- ----------------------------- --------- ----------
Free cash flow
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- ------------------------- --------- ----------
Headline operating cash
112.6 flow 62.1 44.0
Less:
(7.4) Restructuring cash flows (1.0) (4.3)
(5.8) Interest paid (3.3) (2.6)
(15.4) Income taxes paid (1.6) (5.3)
84.0 Free cash flow 56.2 31.8
----------- ------------------------- --------- ----------
Headline operating cash conversion
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- -------------------------- --------- ----------
Headline operating cash
112.6 flow 62.1 44.0
112.2 Headline operating profit 62.8 50.5
Headline operating cash
100.4% conversion 98.9% 87.1%
----------- -------------------------- --------- ----------
Free cash flow conversion
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- -------------------------- --------- ----------
84.0 Free cash flow 56.2 31.8
112.2 Headline operating profit 62.8 50.5
74.9% Free cash flow conversion 89.5% 63.0%
----------- -------------------------- --------- ----------
Headline tax charge
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- ----------------------------- --------- ----------
21.0 Tax charge 12.3 9.1
Tax on amortisation of
2.3 acquired intangibles 1.1 1.2
Tax on exceptional items and
0.2 acquisition costs - 0.1
23.5 Headline tax charge 13.4 10.4
----------- ----------------------------- --------- ----------
Headline tax rate
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- ----------------------- --------- ----------
23.5 Headline tax charge 13.4 10.4
Headline profit before
105.5 taxation 59.3 47.1
22.3% Headline tax rate 22.5% 22.2%
----------- ----------------------- --------- ----------
Headline earnings per share
A detailed reconciliation is provided in note 5 of the condensed
consolidated financial statements.
Net debt a nd net debt excluding lease liabilities
Half Half year
Year ended year to to
31 Dec 30 June 30 June
2022 2023 2022
GBPm GBPm GBPm
----------- -------------------------- --------- ----------
37.2 Cash and bank balances 25.9 36.2
Bank overdrafts (included
(1.0) in borrowings) (0.1) (2.9)
Bank loans (included
(69.6) in borrowings) (52.4) (90.8)
Net debt excluding lease
(33.4) liabilities (26.6) (57.5)
(66.0) Lease liabilities (62.2) (64.1)
(99.4) Net debt (88.8) (121.6)
----------- -------------------------- --------- ----------
Revenue and headline operating profit at constant exchange
rates
Reconciled to revenue and headline operating profit in the table
below:
Half year to 30 June 2023
---------------------------------------------------
Central
cost
ADE AGI and eliminations Consolidated
GBPm GBPm GBPm GBPm
Revenue 180.5 239.6 - 420.1
Constant exchange rates adjustment (5.5) (6.8) - (12.3)
------------------------------------- ------- ------- ------------------ -------------
Revenue at constant currency 175.0 232.8 - 407.8
------------------------------------- ------- ------- ------------------ -------------
Less energy surcharges (12.9) (25.1) - (38.0)
------------------------------------- ------- ------- ------------------ -------------
Revenue excluding surcharges
at constant currency 162.1 207.7 - 369.8
------------------------------------- ------- ------- ------------------ -------------
Headline operating profit 32.2 43.7 (13.1) 62.8
Constant exchange rates adjustment (0.8) (0.3) 0.3 (0.8)
Headline operating profit at
constant currency 31.4 43.4 (12.8) 62.0
------------------------------------- ------- ------- ------------------ -------------
Company information
Financial calendar
Results for 2023 March 2024
Annual General Meeting May 2024
Final dividend for 2023 June 2024
Interim results for 2024 July 2024
Interim dividend for 2024 November 2024
Shareholder enquiries
Enquiries on the following administrative matters can be
addressed to the Company's registrars at Equiniti Limited, Aspect
House, Spencer Road, Lancing, West Sussex BN99 6DA. Telephone +44
(0)333 207 5951. Lines open 8:30am to 5.30pm (UK time), Monday to
Friday excluding public holidays in England and Wales); Email: Log
on to help. shareview.co.uk (from here you will be able to email
your query securely).
-- Change of address
-- Stock transfer form including guidance notes
-- Dividend mandates
-- ShareGift donation coupon
Forms for some of these matters can be downloaded from the
registrars' website www.shareview.co.uk . Shareholders can easily
access and maintain their shareholding online by registering at
www.shareview.co.uk . To register, shareholders will require their
shareholder reference number which was recently provided.
Shareholder dealing service
For information on the share dealing service offered by Equiniti
Limited, telephone +44 345 603 7037. Lines open 8.00am to 4.30pm
(UK time), Monday to Friday excluding public holidays in England
and Wales). Please either telephone Equiniti or look online at
www.shareview.co.uk for the up to date commission rates.
General information
Copies of this report and the last Annual Report are available
from the Group Company Secretary, Bodycote plc, Springwood Court,
Springwood Close, Tytherington Business Park, Macclesfield,
Cheshire SK10 2XF, and can each be downloaded or viewed via the
Group's website at www.bodycote.com . Copies of this report have
also been submitted to the FCA Electronic Submission System which
is situated at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
Bodycote plc
Springwood Court
Springwood Close
Tytherington Business Park
Macclesfield
Cheshire
United Kingdom
SK10 2XF
Tel: +44 1625 505 300
Fax: +44 1625 505 313
Email: info@bodycote.com
(c) Bodycote plc 2023
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END
IR NKABDCBKDBOB
(END) Dow Jones Newswires
July 27, 2023 02:00 ET (06:00 GMT)
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