Bodycote International PLC
18 December 2007
18 DECEMBER 2007
BODYCOTE INTERNATIONAL PLC TRADING UPDATE
Bodycote International PLC is issuing this update prior to entering its close
period on 31 December 2007.
TRADING
Sales growth for the year to date (at constant exchange rates) has been 18% of
which 8% is organic and a further 10% is from acquisitions. Actual sales growth
has been 15%, with the difference principally due to the weakness of the US
dollar. Aerospace, power generation and oil & gas demand remains robust in all
territories and automotive sales have continued to be buoyant in Europe.
Thermal Processing turnover has increased 15%1 (7% organic). Europe continues
to be robust. North America has been temporarily affected by the previously
announced closure of two large and several smaller facilities. The exceptional
cost of closing and remediating these facilities has increased by £3m. Margin
development continues to meet expectations even after incurring the start-up
costs at our greenfield facilities in China, India and Mexico.
In Testing, sales have increased 26% 1 (10% organic) in line with our growth
strategy. Margins have been impacted by start-up costs at a number of new
facilities in Singapore, the Middle East and Mexico. In response to continuing
softer trading conditions in North America, we have taken a number of actions to
streamline the business including senior management changes, the closure of
certain testing activities in Canada and rationalising our eight automotive
testing facilities into a single centre of excellence in Detroit. The total
exceptional cost of all this reorganisation is expected to be £2m, with a
payback in less than two years.
Cash flow performance continues to be satisfactory and the net finance charge
will be slightly lower than in 2006.
The Board expects to announce that full year sales and headline operating profit
2 will be within the range of market forecasts.
1 at constant exchange rates
2 excluding impairment of goodwill and equity investments, amortisation of
acquired intangibles, major facility closure costs and interest and tax on
associates.
OUTLOOK
Our key aerospace, power generation and oil & gas sector customers are
forecasting buoyant conditions for 2008. Despite continuing softness in the
North American automotive market, the Board remains confident that the Group
will make further progress towards its strategic objectives in the coming year.
Preliminary results will be announced on 26 February 2008
Telephone conference at 0900 hours GMT:
Dial-in number is +44 (0) 1452 569 393.
Call reference, if there are any problems, is 28295745
For further information, please contact:
Bodycote International plc Tel No: +44 (0)1625 505300
John D. Hubbard, Chief Executive
David Landless, Group Finance Director
Financial Dynamics Tel No: +44 (0) 20 7831 3113
Jon Simmons
James Ottignon
This information is provided by RNS
The company news service from the London Stock Exchange
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