Bodycote's (BOY) substantial City-based fan club was in buying mood after the heat-treatment specialist revealed that underlying pre-tax profit jumped by a tenth in 2013 to £104m. In a falling market, its shares rose over 8 per cent to levels last seen in 1998. Margins are accelerating and a fourth year of strong cash conversion encouraged management to announce a special dividend of 10p a share.
Clearly, the second half was much better than the first, when organic sales, which exclude foreign exchange and acquisition benefits, fell 5 per cent. They slipped just 1 per cent in the final six months, and finance chief David Landless tells us sales had moved into "modest positive territory" in early 2014. Margins improved significantly last year, too. A 70 basis point increase to 17.3 per cent explains why organic profit fell just £0.4m, even though the form lost almost £15m of sales.