Bodycote profit soars, ups divi

Metals and alloys treatment firm Bodycote said profit surged 68% after strong demand at its aerospace and defence unit and robust sales overseas.

The group said despite economic headwinds, particularly in Europe, the business would continue to make progress in the coming year.

In a separate announcement Bodycote said it has signed a five-year contract with ZF Lenksysteme, a joint venture between Robert Bosch GmbH and ZF Friedrichshafen to provide heat treatment services in China for heavy truck steering components.

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Bodycote yesterday announced a £12.75m investment programme in north America as it beefs up business in the aerospace, defence and energy markets. It is also driving growth at its Hot Isostatic Pressing (HIP) division. Revenues at the unit grew by over 60%.

Pre-tax profit from continuing operations rose to £75.8m for the year ended 31 December 2011 from £45.2m previously. Revenue from continuing operations increased to £570.7m from £499.8m the year before.

Headline operating margin rose to 15% from 10.4% last year and it intends on improving this further.

Commenting on the group's progress chief executive Stephen Harris said the group's strategy is aimed at growing the business above and beyond the background growth rate of the global economy.

"The pace of execution of this strategy is gaining momentum and we enter 2012 in good shape."

He added, "The macroeconomic environment may continue to be challenging, but with nearly half of the group's activity in areas which have long term growth drivers that are less likely to be impacted by economic headwinds."

A dividend of 10.9p has been recommended, up from 8.7p the year before.