Bodycote Share Price (BOY)

+ Turnover down due to falling energy costs (but expensive energy is BOY's rationale).

+ £28m written off on failed ERP software solution

+ Lake City and Stack Metalurgical contributed £18m turnover but turnover was down from £420m to £400m

+ Debt up by cost of aquisition of US businesses. (all cash flow is disbursed to shareholders).

+ The business targets and achieves a ROCE of about 15% which is probably why it wrote off the ERP software.

(As I understand it ROCE excludes goodwill costs). Goodwill is up 30% since 2018 when earnings were higher.

On the plus side the cash flow is reasonably strong (partly due to disinvestment?) and the forward P/E at around 15 is not too demanding.

I am trying to predict profits from the trading update.

Debt will be reduced by a little over £20m. (The cash stays steady).

From past years depreciation will exceed investment by about £15m

Dividends will be around £38m

There is also the affect of energy surcharges on receivables which will be down by say £10m because gas prices were down

So profit p is

p = 20 -15 +38 -10

p = £33m

Say plus or minus say £20m but significantly down.

Looking at the revenue growth it looks to be below wage costs.

The Trading update said:

Outlook

Reflecting the good progress achieved year-to-date, the Board’s expectations for full

year 2023 remain unchanged. Looking beyond this year, the Board remains confident in

the Group’s prospects for continued profitable growth.

So It looks to me as if they are talking jam tomorrow.

Broker recommendations are also a bit weak.

That's a nice piece of news and a decent sp rise to start the week.

GLA.

Mac

Price is about 90% of where it should be I'm guessing. The US business side is key to re-rating over time as nothing in Europe carries any value by the markets whose purpose is simply to extract money from investors. Like a sort of secondary tax.

Yeah, I'm interested in this one. Heard about it on Naked Trader, and it does indeed look very cheap.