(Alliance News) - Bodycote PLC said Thursday the coronavirus pandemic has "severely impacted" its trading.
Shares in the coating services firm were 5.1% lower at 728.00 pence each.
For the four months to the end of October 31, revenue dropped 20% year on year to GBP193.6 million. Bodycote noted the sharp drop in the period still represented a recovery from the 28% decline in constant currency revenue in the second quarter when the Covid-19 related downturn was at its peak.
For the 10 months to October 31, revenue was down 18% at GBP500.3 million.
"Overall, profitability has held up relatively well in light of the significant drop in revenues. We have continued to prioritise the health and safety of our employees and other stakeholders. We are taking all necessary actions to maintain a safe working environment for our employees, who have responded magnificently to this year's challenges," Bodycote said.
The company has declared an interim dividend of 6.0 pence, following suit to the prior year.
Bodycote noted its two divisions experienced "differing fortunes" during the period, with revenues in the Aerospace, Defence & Energy business declining 33%, while revenues in the Automotive & General Industrial division were down 15%.
"Our expectation is that the civil aerospace market will remain near the current low levels for at least the next 18 months. This provides us with the opportunity to consolidate our ADE footprint into fewer, larger facilities. The exercise to do this requires significant study, since we expect the civil aerospace market to recover strongly in due course and we want to be in the best position possible to take full advantage as this happens. There will, therefore, be a further restructuring programme, similar to the programme already announced in the first half, but which will be more focused on our ADE business. We will provide further details with our full year results in March," the company added.
In its AGI unit, Bodycote said it has "recovered strongly" from the steep revenue declines in the second quarter.
Bodycote continued: "Indeed, as we have reduced our cost base, significant parts of this business are exiting the period with higher margin levels than at the back end of 2019, despite continued lower revenues. As revenues recover further, therefore, we are well placed to benefit from the step change improvement in the quality of this business."
By Paul McGowan; paulmcgowan@alliancenews.com
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Bodycote (BOY)