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Civil aerospace the principal bugbear for Bodycote

The group swung to a full-year reported pre-tax loss as supply chains creaked through 2020
March 12, 2021
  • The group recorded a pre-tax loss, though write-downs played a part
  • Automotive volumes recovered partially as the year progressed

Bodycote (BOY) has stated that “it is hard to imagine a set of circumstances that could be more testing” as a preface to its full-year figures. It is difficult not to concur.

The group, which provides thermal processing services across a range of industries, endured a torrid time through 2020, as supply chains creaked under the influence of the pandemic.

The group swung to a reported pre-tax loss through the year, though that was largely due to £58.4m in exceptional charges. On the plus-side of the ledger, it maintained a lengthy record of growing dividends year-on-year, as free cash flow remained healthy at £106m, with an improved cash conversion rate a part-reflection of a wind-down in receivables.

Automotive revenues halved during the second quarter, but staged something of a comeback by the final three months as original equipment manufacturers reopened their doors. The aerospace & defence segment fared better than automotive initially, but underperformed over the remainder of the year.

Though the group’s restructuring programme is now largely complete, major uncertainties persist over recovery prospects for the civil aviation market. Sell.

Last IC view: Sell, 602p, 23 Jul 2020

BODYCOTE (BOY)   
ORD PRICE:796pMARKET VALUE:£ 1.52bn
TOUCH:795-796p12-MONTH HIGH:803pLOW: 378p
DIVIDEND YIELD:2.4%PE RATIO:3978
NET ASSET VALUE:355p*NET DEBT:16%
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)† Dividend per share (p)
201660192.035.215.8
201769011751.017.4
201872913254.219.0
201972012449.419.3
2020598-1.500.2019.4
% change-17--99.6+1
Ex-div:22 Apr   
Payment:04 Jun   
*Includes intangible assets of £324m, or 169p a share. † Excludes special dividends of 10p in 2015, 25p in 2017 and 20p in 2018.