There will be no special dividends for Bodycote (BOY) shareholders for the 2016 accounting year, with the board prioritising "superior returns" from "potential transactions, as well as other investments to support growth".
As well they might. The specialist coatings business continues to feel the pinch from depressed oil and gas markets, despite an increased contribution from more profitable areas of its business mix. Indeed, revenue from oil and gas suffered another big drop in 2016, falling by more than 40 per cent at constant exchange rates, feeding through into a 3.5 per cent decline at the group level on an adjusted basis. Although crude prices have stabilised, management admits that "it is too early to tell whether investment will pick up in the oil and gas sector in the near term".
The good news is that the higher-margin specialist technologies segment increased its share of adjusted profit to 42 per cent. Overall, demand from the automotive industry remained buoyant through the year, while orders from Europe's civil aerospace sector strengthened during the second half of 2016.
N+1 Singer analysts expect to increase their current 2017-end forecasts of £102m in adjusted pre-tax profit and EPS of 38.5p, against the £97m and 37.3p achieved in 2016.
| BODYCOTE (BOY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 764p | MARKET VALUE: | £1.46bn | |
| TOUCH: | 764-765p | 12-MONTH HIGH: | 765p | LOW: 500p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 328p* | NET CASH: | £1.1m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 588 | 90.0 | 35.9 | 12.3 |
| 2013† | 620 | 98.4 | 38.5 | 13.5 |
| 2014† | 609 | 104 | 41.7 | 14.4 |
| 2015† | 567 | 75.0 | 29.6 | 15.1 |
| 2016 | 601 | 91.9 | 35.2 | 15.8 |
| % change | +6 | +23 | +19 | +5 |
Ex-div: 20 Apr Payment: 2 Jun *Includes intangible assets of £207m, or 108p a share †Excludes special dividends of 10p in 2013, 20p in 2014 and 10p in 2015 | ||||
