Bodycote Share Price Climbed 6.83% on Upbeat FY 2023 Results

The Bodycote PLC (LON: BOY) share price climbed 6.83% after the company released its full-year results for the year ended 31 December 2023. In the latest financial overview, the company has showcased an impressive performance, marking significant advancements in revenue, profit margins, and shareholder returns.

With a total revenue increase of 8% to £802.5 million, the company's growth momentum remains robust, demonstrating a 6% rise even when adjusting for energy-related surcharges. This financial year has seen headline operating profits ascend to £127.6 million, a commendable 17% increase on a constant currency basis.

A closer examination reveals an operating margin enhancement to 15.9%, an 80 basis points improvement, with an even more pronounced margin of 17.3% upon excluding surcharge revenues, marking a 120 basis points increase. Earnings per share have also seen a healthy uptick, with headline basic EPS growing by 13% to 48.4p. 

Furthermore, the return on capital employed has surged by 150 basis points, reaching 14.8%, reflecting the efficient use of capital in driving profitability. Cash flow dynamics have also trended positively, with free cash flow witnessing a £38.5 million improvement to £122.5 million.

In a continued commitment to shareholder value, the full-year dividend has been increased by 7% to 22.7p per share, maintaining a 36-year legacy of consistent dividend growth or stability. 

The company has achieved notable operational successes, particularly within its Specialist Technologies segment, which saw a 12% revenue growth excluding surcharges. This growth has been supported by solid performances across the aerospace, oil and gas, and medical markets. 

Remarkably, the company has reduced its absolute energy consumption by 4%, even amidst an 8% revenue increase, highlighting its commitment to operational efficiency and environmental sustainability.

The strategic focus on margin improvement is bearing fruit, with the company on a clear path to achieving operating margins exceeding 20% over the medium term. This has been complemented by a disciplined approach to capital allocation, evidenced by the acquisition of Lake City for £52 million in January 2024 and the initiation of a £60 million buyback program starting 15 March 2024.

The company's financial and operational strides underscore its successful execution across strategic focus areas, positioning it well for sustained growth and profitability.

Bodycote share price. 

The Bodycote share price climbed 6.83% to trade at 672.5p from Thursday’s closing price of 629.5p.