Bodycote – set for growth

Bodycote demonstrated its resilient qualities in its recent full-year results unveiled in March. The company, which provides thermal processing services, has a market capitalisation of £1.1 billion and includes Airbus and Boeing as its clients.

Operating profits grew by 19% to £112.2 million, while revenues increased by 20.8% to £743.6 million (17.3% at constant currency rates).

The firm managed to pass on increased energy and labour costs through price increases, while net debt has reduced to £33.4 million from £51.9 million in the same period last year.

Its emerging markets division also grew revenues by 24% to £93 million over the full-year, despite the company seeing little or no growth in its Chinese markets due to the Covid lockdowns there.

Meanwhile, sales at the specialist technologies division increased by 18% to £228 million during the period and aerospace revenues are up by the same figure last year.

The company issued an upbeat outlook statement, saying that despite “macroeconomic uncertainties”, it expects underlying volume growth to continue and margin expansion.

Meanwhile, after 2023, Bodycote’s management expects “robust growth”, its civil aerospace division to benefit from higher OEM build rates and its investments in emerging markets and specialist technologies to “drive higher growth in these areas.”

Last year analysts at Berenberg Bank set a price target of 780p, albeit cutting this from 1,030p. At 606p, the shares are down by 13% over the past year but could be a good defensive option.