Interim Management Statement

RNS Number : 5986C

Bodycote PLC

17 November 2009

 



17 November 2009 

Bodycote plc

Interim Management Statement

Bodycote plc, the specialist thermal processing company, today issues its Interim Management Statement, covering the period from 1 July to 16 November 2009, and provides an update to its outlook for the year ending 31 December 2009.

Current Trading

At the interim results we reported that Group revenue, on a continuing basis, in the first half of 2009 was £227.9m. This was 19.4% lower (31.0% at constant exchange rates) than in the equivalent period of 2008.  Consequently the Group recorded a headline operating loss of £1.7m, compared to a headline operating profit of £41.0m for the same period of 2008.

At that time we indicated that there had been some modest improvement in automotive demand, compared to the very depressed levels in the early part of the year, but that aerospace and oil and gas demand was softening. In the period 1 July to 31 October, sales were 26.4% lower than the same period last year (32.6% in constant currency) and overall sales levels and segmental trends have broadly remained similar to those seen in the second quarter.  These changes in demand levels are consistent across all territories in which the group operates, and geographic results reflect the typical mix of sector exposure.

Financial Position

The financial position of the Group remains strong and is substantially unchanged since the interim results. Net borrowings at 31 October were £109.5m compared to £88.7m at 30 June, as a result of normal seasonal cash flows of the business and cash costs relating to the restructuring outlined below.  

As previously stated, the Group intends to complete the refinancing of the revolving credit facility, which matures in August 2010, before the end of 2009. Discussions with the Group's banking syndicate remain on track to achieve this.

Restructuring

The Group previously announced restructuring plans aimed at delivering a significant reduction in the cost base, along with a reshaping of the business via the closure of facilities which had performed inadequately during the strong market conditions that had prevailed until the end of the third quarter of 2008. The total cost of these actions, as previously announced, is £97.4m of which £51.1m relates to asset write downs and £46.3m are cash costs.  Cash expended in the first half of 2009 was £10.2m and in the period 1 July to 31 October was £10.3m and full year expenditure is expected to be £30.1m, with £14.1m to come later.  Savings associated with these actions are expected to be £41m on an annualised basis, of which £28.3m will be realised in 2009,   and the full amount will be seen in 2010. These plans remain on track in terms of cost, timing and benefit and, as stated previously, we have now begun the reorganisation of the Group's activities in Brazil.

Outlook

Demand visibility remains limited, due to the Group's short order book. We expect the trends in the market seen since the interim results to continue for the remainder of 2009.

Cautionary Statement

This press release contains forward looking statements which are made in good faith based on the information available up to the time of its approval. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a number of risks and uncertainties that are inherent to any forward looking statement which could cause actual results to differ from those currently anticipated.

Investor Conference Call

Stephen Harris and David Landless will be hosting a conference call for analysts and investors at 0830 hours today (17 November).

Dial in Number: [phone]

Playback Details

UK Toll Access Number:                 020 8609 0289

UK Toll Free Access Number:         0800 358 2189

US Toll Free Access Number:         [phone]

Conference Reference:                  276582#

For further information, please contact:

Bodycote plc, Stephen Harris, Chief Executive

Bodycote plc, David Landless, Group Finance Director

Tel No [phone]

Financial Dynamics

Jon Simmons, Susanne Yule

Tel No [phone]

 

END

 

 

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