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Panmure Gordon reiterated its "buy" recommendation for Bodycote (BOY) with an increased target price of 540p, from 505p. The broker is very impressed with the strength of the thermal processing company's balance sheet, claiming it is far superior to those of its larger peers, Cookson (CKSN) and Morgan Crucible (MGCR). Panmure added that the group has improved its product mix, with greater exposure to the higher margin later cycle end-markets.
BODYCOTE COPES WITH HEAT Much is made of Bodycote ’s heavy exposure to Europe and the inevitable currency impact. Yet the heat treatment specialist makes more money from fast growing sectors, like aerospace and energy, than anything else, which should offset turbulence elsewhere – leaving the shares looking too cheaply rated. That said, management admit that 40 per cent of the business – the automotive and general industrial operations in Europe – is softening. French car manufacturers are struggling and Germany was weaker in the second quarter. This has rippled out to Poland and the Czech Republic and China has been a "bit less exciting". Still, these trends have been well-flagged and weaker demand in emerging markets – just 10 per cent of sales – isn't expected to last. Significantly, 60 per cent of the business is in growth mode. Cars and trucks are still selling well in North America and sales to the aerospace and defence industry grew nearly a fifth during the period, with the headline operating profit margin having hit 24 per cent. That trend is unlikely to change given the production ramp-up at Boeing and Airbus. Elsewhere, revenue from oil and gas work was up a third, and North American mining and agricultural equipment made a big contribution, too. Investec Securities has trimmed forecasts for full-year adjusted pre-tax profit by 4 per cent to £88m, giving adjusted EPS of 34.8p (from £80.9m and 32.1p in 2011). IC VIEW: Bodycote carries little debt and pays a decent dividend. Demand from aerospace and energy markets is growing fast, too, and a forward PE ratio of nine factors in a weak Europe. BUY. Source: http://www.investorschronicle.co.uk/2012/07/26/shares/news-and-analysis/bodycote-copes-with-heat-QUOQWoryNgRteESE41cGXP/article.html P.S. Here's a couple of links about SCLP, one of the hottest stocks at the moment: http://www.euroinvestor.com/community/discussionthread.aspx?threadid=256596 http://www.euroinvestor.com/community/discussionthread.aspx?threadid=254627
BODYCOTE PROFITS RISE NINE PER CENT TO £43M Engineering giant Bodycote posted a near-nine per cent hike in interim profits as sales topped £300m. Bodycote, which has its headquarters in Macclesfield, announced pre-tax profits of £43.8m for the six months to June 30, up from £40.3m, and increased its first-half dividend by 11 per cent to 4p. Sales grew 4.5 per cent from £288.2m to £301.3m, boosted by strong growth in aerospace, oil and gas and from the automotive market in north America, which offset weaker demand from the sector in Europe. Bodycote, which heat-treats jet landing gear and engine turbine blades as well as other parts for plane and car makers and energy and defence businesses, is investing in new facilities in Toulouse and in Jinan, China, and is expanding its operations in Mexico and Ohio. The firm paid £32.6m in April for the heat treatment business of US business Curtiss-Wright Corporation, which Bodycote said had performed ahead of expectations. Bodycote chief executive Stephen Harris, above, hailed a strong first half performance despite weaker demand in Europe, and said growth in aerospace and energy together with new technologies is expected to counter the effect of slowing economies in the second half. Source: http://menmedia.co.uk/manchestereveningnews/news/business/s/1584536_bodycote-profits-rise-nine-per-cent-to-43m
SUMMARY AND OUTLOOK The Group delivered a strong first half performance despite currency headwind and weakened demand in the Eurozone economies. Looking forward into the second half, growth in aerospace and energy together with new technologies, is expected to counteract the effect of slowing economies. The Board remains confident that the ongoing execution of the Group's strategy will continue to deliver superior through-cycle shareholder returns.
Commenting, Stephen Harris, Chief Executive said: "The Group delivered a strong first half performance despite currency headwind and weakened demand in the Eurozone economies. Looking forward into the second half, growth in aerospace and energy together with new technologies, is expected to counteract the effect of slowing economies. The Board remains confident that the ongoing execution of the Group's strategy will continue to deliver superior through-cycle shareholder returns."
Highlights · Revenue up 5%; 7% at constant currency · Good growth from North American Automotive & General Industrial and Aerospace & Energy in all geographies · Headline operating profit up 10%, with headline margin up to 15.8% · Recent US acquisition performing well · 110% headline operating cash conversion6 · Free cash flow exceeded cost of US acquisition · Net debt at £16.7m · Interim dividend up 11% to 4.0p
http://www.investegate.co.uk/Article.aspx?id=201207260700095282I
Stephen Harris, who has held the role of Chief Executive Officer at FTSE 250 heat treatment firm Bodycote for over three years, sliced off a sizeable chunk of his shares on May 4th. Harris, who has also been a director of Spectris, ditched 94,000 shares at 421.00p each, earning himself the handsome sum of £395,740. He now holds 542,983 shares in the firm.
BODYCOTE OPENS NEW SURFACE TECHNOLOGY FACILITY IN HOUSTON, TEXAS NEW PLANT TO OFFER VITAL SERVICES TO OIL & GAS MARKET MACCLESFIELD (U.K.) - Bodycote (LSE:BOY), the world's largest thermal processing services provider, today announces that the company will open a new surface technology plant in Houston, Texas. The new plant, scheduled to open during the third quarter of 2012, will enable Houston's large oil & gas market to access Bodycote's specialist expertise in high velocity oxy fuel (HVOF) spraying of tungsten carbide and the K-Tech® family of thermochemically-formed ceramic treatments, which are particularly suited to treat components operating in severe service applications. The new plant complements Bodycote's heat treatment facilities in Texas, and the surface technology facility in neighbouring Arkansas, which provides ceramic treatments. Bodycote has a total of 43 facilities in the USA providing the full range of Bodycote's services.
Bodycote, the heat treatment firm, has made a sensible purchase of US outfit Curtiss-Wright, thinks Tempus in the Times. Revenues have also been strong, 8.3% up in the first quarter, with aerospace, defence and energy particularly impressive. The shares trade at around 12 times 2012 earnings, which Tempus believes is par, the recommendation is hold.
ACQUISITION OF HEAT TREATMENT BUSINESS OF CURTISS-WRIGHT Bodycote announced on 2 April 2012 the acquisition of the heat treatment business of Curtiss-Wright Corporation for a total consideration of US$52m. In the twelve months to December 2011 the business delivered EBIT of US$7.7m on revenues of US$36.5m. The business comprises nine sites in Northern and Central USA serving a wide range of industries but with a particular focus on commercial aerospace and oil & gas (34% of sales). It also features some key automotive accounts (20% of sales). FINANCIAL POSITION Net debt as at 31 March 2012 was £20.2m, compared to net cash of £0.1m at 31 December 2011 and includes acquisition costs of £32.1m (US$52m). OUTLOOK Bodycote has delivered a good performance in the first quarter of 2012. The Board's expectations for the full year, for the business excluding the acquisition, are unchanged from the time of our full year results presentation in February.
INTERIM MANAGEMENT STATEMENT 25 APRIL 2012 Bodycote is issuing its interim management statement covering the period from 1 January to 24 April 2012, ahead of the company's 59th Annual General Meeting, which will be held at 11.00 am today. The financial and operational data set out below are in respect of the Group's first quarter (1 January to 31 March 2012) unless otherwise stated. CURRENT TRADING Revenue for the three months to 31 March 2012 was 6.9% higher than in the same period last year (8.3% at constant exchange rates). Sales in Aerospace, Defence & Energy were ahead by 13.5% (at constant exchange rates) compared to the same period in 2011. Revenues from the commercial aerospace sector continued to grow well, with both OEM and maintenance and repair requirements increasing. The defence sector remained stable. Sales into Oil & Gas customers grew strongly. Industrial Gas Turbine demand has maintained the trend that was established in the second half of 2011, with North America remaining more buoyant than Europe. In Automotive & General Industrial, automotive sales continued to improve in North America but, as anticipated, there was some softness in continental Europe. Revenues from general industrial customers remained robust, although growth rates were lower than in the corresponding quarter of 2011. In total, Automotive & General Industrial revenues were higher than Q1 of 2011 by 4.8% (at constant exchange rates).
http://www.investegate.co.uk/Article.aspx?id=201204250700159951B
Investec raises target from 400p to 410p, buy rating kept.
Bodycote: Jefferies maintains buy recommendation and 475p target;
http://www.investegate.co.uk/Article.aspx?id=20120323084511P001C
BODYCOTE AND ZF LENKSYSTEME (JINAN / CHINA) SIGN 5-YEAR AGREEMENT MACCLESFIELD (U.K.) - Bodycote (LSE:BOY), the world's largest thermal processing services provider, today announces the signing of a five year contract with ZF Lenksysteme, a joint venture between Robert Bosch GmbH and ZF Friedrichshafen AG. Bodycote will provide ZF Lenksysteme (ZFL) with premium heat treatment services in China for heavy truck steering components, all of which are consumed within the local Asia market. ZFL's advanced truck steering mechanisms are much in demand in Asia due to their proven ability to safely control very heavily-loaded trucks under variable road conditions. The new contract involves direct support for the ZFL manufacturing facility in Jinan, Shandong Province. The services for ZFL were developed and proven at Bodycote's plant in Wuxi, Jiangsu province as a precursor to establishing a new Bodycote greenfield site in Jinan, near the ZFL facility. The work will be transferred to the Bodycote Jinan facility, once construction of this new site has been completed later this year. This will make way for further business development at Wuxi, while at the same time helping the expansion of Bodycote's services to other customers in the region of Jinan.
Commenting, Stephen Harris, Chief Executive said: "Bodycote's strategy is aimed at growing the business above and beyond the background growth rate of the global economy while delivering consistently superior value. The pace of execution of this strategy is gaining momentum and we enter 2012 in good shape. 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 we believe there is a good prospect that the business will continue to move forward in the coming year."
Highlights · Revenue growth of 14.2% · Broad-based market recovery has continued · Significant benefit from growth initiatives · Headline operating profit margin improved from 10.4% to 15.0% · Continued strong cash generation, headline operating cash conversion6 112.3% · Year end net cash £0.1m · Dividend increased by 25.3% to 10.9p per share
http://www.investegate.co.uk/Article.aspx?id=201202230700129445X
Merrill Lynch upgrades Bodycote from underperform to neutral, target price raised from 290p to 340p
Bodycote (BOY) kept its "buy" rating from Panmure Gordon, with a 440p target price. The broker notes that the heat treatment and metal joiner's shares have fallen into a deep discount, leaving it open for a takeover bid. Panmure calculates that even after accounting for a bid premium the company offers compound annual returns of between 16.7% and 23.1%, well ahead of prospects that led to the bid for Charter International (CHTR). Shares in Bodycote dropped 8.6p to 247.3p.
JP Morgan Cazenove downgrades Bodycote from overweight to neutral, target cut from 507p to 330p.
Goldman downgrades Bodycote from buy to sell - target 380p from 515p