Bodycote Plc - Bodycote plc - 2025 Interim Results
Strategic progress despite challenging end markets;
Full Year Outlook Unchanged
Adjusted1 Statutory
Group summary
Half year Half year Half year Half year
2025 2024 Change 2025 2024 Change
Revenue £369.0m £399.0m -7.5% £369.0m £399.0m -7.5%
Operating profit £55.1m £66.8m -17.5% £41.2m £30.8m +33.8%
Operating margin 14.9% 16.7% -180 bps 11.2% 7.7% +350 bps
Operating cash flow £37.7m £49.2m -23.4% £65.8m £71.7m -8.2%
Basic earnings per 21.3p 25.0p -14.8% 15.5p 10.2p +52.0%
share2
Interim dividend per 6.9p 6.9p -
share
Core summary1 Half year Half year Organic
2025 2024 Change
Revenue £351.9m £374.6m -3.6%
Adjusted operating profit £54.3m £65.9m -14.7%
Adjusted operating margin 15.4% 17.6%
Excludes Non-core sites included in the original Optimise programme, as stated at the 2024 Capital Markets Event (CME).
Highlights
# Performance in line with expectations provided in May trading update; full year outlook unchanged # Market conditions remain challenging, though momentum improved through H1 with sequential growth seen in almost all end markets vs soft 2H24 (Core revenue +4.3%) # Core revenue -3.6% YoY organically, impacted by weak Industrial and Automotive markets and delivery phasing in Specialist Technologies; Group revenue -4.6% YoY organically (-7.5% total) # Adjusted operating profit of £55.1m (1H24: £66.8m), due to lower revenue, mix and FX impact; statutory operating profit higher at £41.2m (1H24: £30.8m) due to lower exceptional charges # Adjusted operating margin of 14.9% (1H24: 16.7%) reflecting lower revenues and divisional mix # Continued good progress on the Optimise, Perform and Grow strategy laid out at our 2024 CME # Key Perform and Grow programmes underway, including roll-out of service quality initiatives and targeted capacity expansions for future growth # Optimise programme enhanced: expected profit benefit increased to at least £15m (previously £12-14m) and net execution costs post-disposals materially reduced to £10-15m (vs. £25-30m) # Remain confident in delivery of our medium term financial targets # Additional £30m share buyback announced, enabled by strong balance sheet and low leverage # Full year outlook unchanged and in line with market expectations.3 Macro environment remains uncertain; H2 profit improvement expected, reflecting Optimise benefits, continued Aerospace recovery and improved Specialist Technologies trading
Commenting,
“ Trading has been in line with our expectations following our May update. Demand is strong in industrial gas turbines, as well as in Aerospace and Defence where supply chain conditions are improving. Automotive and Industrial markets remain weak but saw modest improvement versus a soft second half of 2024.
We made significant progress on our Optimise, Perform & Grow strategy in the period. On Optimise, we are executing well on the original programme and expect execution costs to be lower than previously estimated. Due to this increased confidence in execution, as well as ongoing challenges in certain end markets, we have expanded the scope of the programme with additional sites and overhead actions.
We have also entered into a contractual process to dispose of a package of Automotive and Industrial sites in France for around £20m in cash proceeds, helping to reduce programme costs.
As a result of these changes, the programme will now deliver an increased annual profit benefit of at least £15m at a materially lower net cost of £10-15m.
We also continue to deliver on Perform and Grow. In Perform, we are rolling out service quality initiatives which are demonstrating tangible early benefits. In Grow, we are investing in our target areas at the same time as improving our sales capability and service offering, which will help to drive an acceleration in our future growth. We have also made significant progress on sustainability, both to reduce our own emissions and improve our customer offering.
Our full year guidance is unchanged and is in line with market expectations.3 While the macro environment remains uncertain, we expect higher profit in the second half underpinned by Optimise benefits, continued recovery in Aerospace, and improved Specialist Technologies performance as we deliver new contract wins. Our focus continues to be on controlling costs and executing on our strategy as we transition Bodycote into a higher quality, more resilient and faster growing business. We remain confident in delivering our medium term financial targets."
1 Adjusted performance measures and Core measures represent the statutory results excluding certain items; Organic measures are stated at constant currency excluding any acquisitions and disposals in the period. These are all considered alternative performance measures (APMs) and a reconciliation to the nearest IFRS equivalent to these measures is provided at the end of these 2025 Interim Results (hereafter ‘Report’).
2 An earnings per share reconciliation is provided in note 4 to the condensed consolidated interim financial statements.
3 Company-compiled consensus available at: https://www.bodycote.com/investors (FY25 operating profit range: £115.7-123.0m, mean: £119.9m)
END
Half Year Results Presentation
Bodycote will host a presentation for investors and analysts at
Webcast : http://bodycote.com/interimwebcast2025
Conference call details:
Access Code: 307359
Questions can be asked online via the webcast service. A recording will also be available after the event.
For further information, please contact:
Bodycote plc
FTI Consulting
Jim Fairbairn , Group Executive Officer
Richard Mountain Ben Fidler , Chief Financial Officer
Susanne Yule Peter Lapthorn , Investor Relations & FP&A
Tel: +44 203 727 1340
Tel: +44 1625 505 300
About
Bodycote is the world's largest provider of thermal processing services with a global footprint. Through Specialist Technologies and Precision Heat Treatment, Bodycote improves the properties of metals and alloys, extending the life of vital components for a wide range of industries, including Aerospace, Defence, Automotive,
Half Year Commentary
Core Overview
Core revenue reduced by 3.6% organically in H1 to £351.9m. This reflected continued weakness in Automotive and Industrial Markets, as well as delivery phasing in Specialist Technologies. By division, Specialist Technologies revenue declined by 7.7% organically, which included the expected impact of the end of Oil & Gas project work in 2024, as well as delivery phasing in HIP Product Fabrication (HIP PF). Momentum improved through the period with flat revenue YoY in May and June, and good growth is expected in H2 as we deliver on new order wins and the Aerospace volume recovery continues. Precision Heat Treatment was resilient given challenging end markets, with revenue down 1.8% organically, as the decline in Automotive and Industrial markets was partly offset by growth in industrial gas turbines, Aerospace & Defence, and Consumer, Medical & Other.
Core adjusted operating profit reduced to £54.3m (H1 2024: £65.9m) driven by lower revenue, alongside the mix effect of a lower share of revenue in Specialist Technologies. Central costs reduced by £1.7m organically, reflecting cost control actions as well as lower charges for share-based incentive pay. Core adjusted operating margins were 15.4% (H1 2024: 17.6%). In H2 we expect a higher level of both profit and margins, driven by improved Specialist Technologies trading as well as increased Optimise benefits, with the majority of the £4-5m full year profit benefit delivered in H2.
Group Overview
Including Non-core businesses, total Group revenue was £369.0m (H1 2024: £399.0m), 4.6% lower organically. This reflected the organic reduction in Core revenue, compounded by a 21.1% reduction in Non-core revenue as Optimise programme plant consolidations take effect. Group adjusted operating profit of £55.1m was down year-on-year (H1 2024: £66.8m) primarily reflecting the lower Core profit.
Group statutory operating profit was £41.2m in the period, up 33.8% from £30.8m in H1 2024. This included a lower level of exceptional charges in the period, including the non-repeat of a £28.3m ERP impairment in H1 2024, partly offset by additional charges relating to the Optimise programme.
Basic adjusted earnings per share was 21.3p (H1 2024: 25.0p), 14.8% lower year-on-year reflecting reduced profit partly offset by a lower share count due to the share buyback programme. The higher statutory profit resulted in improved statutory earnings per share of 15.5p (H1 2024: 10.2p).
Adjusted operating cash flow of £37.7m (H1 2024: £49.2m) was lower year-on-year, due to reduced profit and an increase in capital expenditure, partly offset by the non-repeat of a £6m one-off provision outflow in the prior year. Cash conversion remained healthy at 68% (H1 2024: 74%). Free cash flow of £18.0m was lower year-on-year (H1 2024: £26.0m) as lower adjusted operating cash flow and higher restructuring costs were partly offset by a lower level of cash tax, which was heavily H1-weighted in the prior year.
Closing net debt excluding lease liabilities was £112.5m, with leverage remaining low at 0.6x net debt / adj. EBITDA. Net debt excluding lease liabilities increased from £68.3m at year-end 2024, driven by payment of the full year dividend (£28.7m) and the share buyback programme (£30.9m) which more than offset free cash flow of £18.0m in the period.
Divisional Performance
H1 2024 Organic
Specialist Technologies H1 2025 Change
(restated) Change
Revenue 105.6 116.3 -7.7% -9.2%
Adjusted operating profit 27.0 34.2 -21.1%
Adjusted operating margin 25.6% 29.4% -380bps
H1 2024 Organic
Precision Heat Treatment H1 2025 Change
(restated) Change
Revenue 246.3 258.3 -1.8% -4.6%
Adjusted operating profit 35.9 41.9 -14.3%
Adjusted operating margin 14.6% 16.2% -160bps
H1 2024 Organic
Non-Core H1 2025 Change
(restated) Change
Revenue 17.1 24.4 -21.1% -29.9%
Adjusted operating profit 0.8 0.9 -11.1%
Adjusted operating margin 4.7% 3.7% +100bps
Specialist Technologies
revenue declined by 7.7% organically in the period, with adjusted operating profit of £27.0m (H1 2024: £34.2m) and operating margins of 25.6% (H1 2024: 29.4%).
Performance was impacted by the previously announced end of
Precision Heat Treatment
performed resiliently in challenging conditions, with revenue down 1.8% organically in the half year. Industrial and Automotive demand remained soft in
Non-core: revenue reduced by 21.1% organically, reflecting the impact of site consolidations and closures under the Optimise programme. Adjusted operating profit was £0.8m, modestly lower year-on-year, with operating margins 100bps higher at 4.7%. The improvement in margin reflects the earliest site closures targeting low margin or loss making sites.
Strategic progress: Optimise, Perform, Grow
We have made substantial progress against all three pillars of our strategy in the first half, with an expansion of the Optimise programme, further HEAT initiative roll-outs, and new investments for growth.
Optimise: we have been executing well on the current Optimise programme, with more than half of site closures underway and levels of revenue retention tracking in line with our plans. The majority of overhead savings completed during the first half, with increased benefits to come in the second half. Following additional work, we are announcing an enhanced Optimise programme, with three main changes:
-- Due to more efficient execution we now expect cash spend on the original
programme to be £5m lower than initially planned;
-- Reflecting increased confidence in execution alongside continued
challenges in certain markets, we have re-evaluated the scope of the
programme and have identified additional site consolidations and
overhead savings opportunities. These actions are expected to incur cash
costs of around £10m, with an attractive payback;
-- Finally, where possible we have been exploring alternative exit options
for Non-core sites, and we have now entered into a contractual process
to dispose of a package of 10 Automotive and Industrial sites in France .
This is expected to bring proceeds of around £20m for a collection of
modestly profitable sites, helping to reduce the cost of the overall
programme.
As a result of all these changes, the new programme is expected to cost £10-15m in cash costs (original programme: £25-30m) and to deliver at least £15m in operating profit improvement at full run-rate (original: £12-14m) in mid-2027. Our 2025 expectations remain unchanged at a £4-5m Core profit benefit, weighted to the second half. The expanded programme represents a significant shift in our footprint towards higher quality, longer-cycle and faster growth areas. The programme includes around 30 Bodycote sites (~20% of Group total) and around £80m in revenue (in FY 2024), over a quarter of which we aim to retain by transferring to other sites in the Bodycote network. Core and Non-core as presented in these results does not reflect the expanded programme scope; we intend to re-state our divisional reporting during the second half to reflect these changes.
Perform:
we have continued to roll-out our HEAT programme to embed consistent, high-quality execution in Bodycote. This includes talent and development initiatives, operational efficiency and service quality initiatives, as well as cost base flexibility and sustainability improvements. The pilot programme has yielded a number of encouraging early results, most notably in the roll-out of operational efficiency tools. In one Automotive and Industrial focused Precision Heat Treatment plant in
Grow:
as outlined at our 2024 Capital Markets Event, we are focusing our growth efforts around a set of higher-growth, high-margin target areas. These include faster growing end markets, more advanced processes, and emerging market geographies. A number of investment projects are now underway in these areas, including significant expansions of our Aerospace capacity in
Sustainability
Sustainability is a key part of our strategy, supporting both Perform (through lower emissions and energy costs) and Grow (through our Sustainability customer offering). Our aim is to support our customers to meet their own climate goals, as well as meeting growing global demand for transparency in emissions, energy practice and renewable energy use.
In the first half we saw continued momentum across the Group to deliver against our own climate targets.
H1 also saw the launch of our flagship sustainability programme, B Carbon Smart, helping customers to understand the opportunity that Bodycote provides to reduce the environmental impact of manufacturing their products. This is a key part of our strategy to capture sustainability-related growth opportunities. We have completed our strategy and tool box roll-out and a targeted customer engagement effort is now underway.
Outlook
Our full year guidance is unchanged and is in line with market expectations. 3 While the macro environment remains uncertain, we expect higher profit in the second half underpinned by Optimise benefits, continued recovery in Aerospace, and improved Specialist Technologies performance as we trade new contract wins. Our focus continues to be on controlling costs and executing on our strategy as we transition Bodycote into a higher quality, more resilient and faster growing business. We remain confident in delivering our medium term financial targets.
Financial Review
Financial overview
H1 2025 H1 2024
£m £m
Revenue 369.0 399.0
Adjusted operating profit 55.1 66.8
Amortisation of acquired intangible assets (4.8) (5.3)
Acquisition costs - (2.4)
Exceptional items (9.1) (28.3)
Operating profit 41.2 30.8
Net finance charge (4.6) (4.6)
Profit before taxation 36.6 26.2
Taxation charge (8.6) (6.5)
Profit for the year 28.0 19.7
Group revenue declined by 7.5% to £369.0m in the period (H1 2024: £399.0m), a 4.6% reduction on an organic basis. The organic reduction included a 3.6% fall in Core revenue, driven by continued market weakness in Automotive and Industrial Markets as well as lower Energy sales in Specialist Technologies, due partly to the expected end of oil & gas project work in the
Group adjusted operating profit was £55.1m in the period (H1 2024: £66.8m). The lower profit was driven by the revenue decline and a resulting mix effect due to lower Specialist Technologies sales in the period, partly offset by lower Central costs (+£1.7m) including a reduced share-based incentive pay charge. Statutory operating profit increased to £41.2m (H1 2024: £30.8m) due to a lower level of exceptional charges compared with the prior period due to a £28.3m impairment of our ERP programme in H1 2024.
Exceptional items
Exceptional charges in the period were £9.1m (H1 2024: £28.3m), relating entirely to the previously disclosed costs of the Optimise programme. This programme aims to improve the quality of our portfolio and the Group’s financial performance, including through the exit and consolidation of certain poor performing sites. The charge included site closure costs, severance cost provisions, asset impairments and other related costs. The Optimise programme is expected to improve the quality of our plant footprint and our operational and financial performance. The reduced level of exceptional charge compared with the prior year period reflects the non-repeat of a £28.3m write-down of the Group’s ERP system in H1 2024.
Further detail can be found in note 2 to the condensed consolidated interim financial statements.
Net finance charge
The net finance charge was stable year-on-year at £4.6m, as summarised in the table below:
H1 2025 H1 2024
£m £m
Interest on loans and bank overdrafts (1.8) (1.7)
Lease and other interest charges (1.9) (2.1)
Finance and bank charges (1.1) (1.2)
Total finance charges (4.8) (5.0)
Interest received 0.2 0.4
Net finance charge (4.6) (4.6)
The stable charge reflects modestly higher interest costs, offset by slightly lower lease and other interest charges and finance and bank charges. The Group has access to a £251.0m Revolving Credit Facility maturing in
Taxation
The tax charge for the period was £8.6m (H1 2024: £6.5m). The adjusted tax rate for the Group was 24.2% (H1 2024: 23.5%), before accounting for amortisation of acquired intangibles, acquisition costs and exceptional items. This was in line with our expectations. The effective statutory tax rate was 23.5% (H1 2024: 24.8%).
Earnings per share
Basic adjusted earnings per share reduced to 21.3p (H1 2024: 25.0p), reflecting the lower level of adjusted operating profit in the period. Basic statutory earnings per share for the year increased to 15.5p (H1 2024: 10.2p) reflecting the improved statutory profit due to lower exceptional charges recorded in the year and the impact of the share buyback. Note 4 of the condensed consolidated interim financial statements provides further details of the basis of these calculations.
Management cash flow
H1 2025 H1 2024
£m £m £m
Adjusted operating profit 55.1 66.8
Depreciation and amortisation 35.1 37.7
Other, including impairment and profit on disposal of PPE - 0.1
Adjusted EBITDA1 90.2 104.6
Net capital expenditure (38.0) (34.6)
Principal elements of lease payments (6.8) (6.7)
Provisions movement (0.1) (6.4)
Working capital movement (7.6) (7.7)
Adjusted operating cash flow 37.7 49.2
Restructuring (7.0) (0.4)
Net finance costs (4.0) (3.8)
Net tax (8.7) (19.0)
Free cash flow 18.0 26.0
Net lease liability additions and disposals 4.3 (2.0)
Ordinary dividend (28.8) (30.1)
Acquisition spend - (54.9)
Ordinary shares purchased for share buyback programme (30.9) (25.8)
Own shares purchased less share-based payments 2.1 3.6
Increase in net debt (35.3) (83.2)
Opening net debt (131.8) (51.7)
Foreign exchange movements (3.2) 1.6
Closing net debt (170.3) (133.3)
Lease Liabilities 57.8 65.3
Net debt excluding lease liabilities (112.5) (68.0)
1 Refer to the APM section for a reconciliation of EBITDA to Adjusted EBITDA
Adjusted operating cash flow reduced to £37.7m (H1 2024: £49.2m), primarily reflecting the lower adjusted operating profit with cash conversion broadly stable at 68% (H1 2024: 74%).
Net capital expenditure was £3.4m higher year-on-year at £38.0m, driven by investment in both maintaining and improving our current asset base as well as growth investment aligned to the Group’s strategy. This included investment in the period on major Aerospace facility upgrades in
Provision movements (excluding restructuring provisions relating to the Optimise programme) were lower year-on-year at £(0.1)m (H1 2024: £(6.4)m), due to a one-off payment in the prior period relating to a historical environmental issue that was fully provided for.
Restructuring cash spend increased to £7.0m (H1 2024: £0.4m) which reflected spend to deliver on the Optimise programme. Net tax reduced materially to £8.7m (H1 2024: £19.0m), with the prior year net tax being unusually H1-weighted due to the timing of payments and tax refunds in the year.
Free cash flow fell to £18.0m (H1 2024: £26.0m), which was driven by the lower adjusted operating cash flow alongside higher restructuring cash spend, offset by the lower net tax payments.
Closing net debt was £112.5m excluding lease liabilities (FY 2024: £68.3m) with the increase driven by payment of the full year dividend (£28.7m) and the share buyback programme (£30.9m) which more than offset free cash flow of £18.0m in the period.
Group principal risks and uncertainties
The Board is committed to protecting and enhancing the Group’s interests through the effective management of risk. As a global business operating in 22 countries, we understand that effectively managing risk underpins the successful performance of the Group.
The Board has ultimate responsibility for the Group’s systems of risk management and internal control and ensures that they are robust, monitored and evolve to address changing business conditions and threats. The Board determines the Group’s risk appetite and ensures that the Group’s exposures to risk are appropriately aligned to the Group’s strategic priorities.
The Board also provides direction and sets the tone on the importance of risk management. The review of financial risk has been delegated to the Group’s Audit Committee.
Emerging risks
Bodycote’s emerging risk identification process is based on horizon scanning. Each emerging risk is assessed based on its potential impact on the Group on a high, medium or low rating across three time horizons: up to two years; two to five years; and more than five years. This process takes place alongside the annual risk review, with emerging risks being considered in facilitated risk workshops conducted with the Executive Committee.
This review helps to identify new and emerging risks and ensures close monitoring of any emerging risks to ensure appropriate mitigating actions are undertaken. As an international group operating in multiple countries, the Group inevitably has exposure to a range of risks and uncertainties. Internal and external factors are considered and inform the Group’s response to managing these risks, many of which are similar in nature to those experienced by comparable companies, and may not always be within the Group’s control. This review will formally conclude in the second half of 2025.
During 2024, the Board identified geopolitical risk, specifically, the unpredictable geopolitical landscape and the uncertainty over future global events as an emerging risk and this risk continues. Tensions in the geopolitical landscape have resulted in the implementation of some trade barriers, with further barriers possible, which could reduce the movement of goods resulting in customers shortening their supply chains and moving them closer to their main production locations. The emerging risk is mitigated by the fact that Bodycote has a global network of sites which allow us to service customers from multiple locations, such that the residual risk exposure is not considered significant.
An additional area of emerging risk identified during the prior year relates to the Group’s ability to attract, retain and develop key skills, knowledge and capabilities. As the global employment environment continues to evolve, attracting new talent to the industry, particularly in engineering and operations will become an increasing priority. The Group appointed a new Chief Human Resources Officer in
Group principal risks
The principal risks and uncertainties outlined in the strategic report of the 2024 Annual Report set out a description of the Group’s principal risks and related mitigation measures, as agreed by the Board, and describe how these principal risks may affect Bodycote’s ability to deliver its strategy. The identified principal risks relate to:
Market and customer Operational Environmental
Markets; and Service quality; Climate change.
Competitor action. Contract review;
Loss of key accreditation;
Major disruption at a facility;
Machine downtime;
Information technology and cybersecurity; and
Investment and capital deployment.
Corporate and community Regulatory
Health and safety. Regulatory and legislative compliance.
Further details of these principal risks and associated risk management processes, including financial risks, can be found on pages 28 to 33 of the 2024 Annual Report.
Alternative performance measures (APMs)
To provide additional information and analysis and to enable a full understanding of the Group’s results, management makes use of several APMs in its internal management of the business and as part of its internal and external reporting. A definition of the Group’s APMs, the reasons that they are used and a reconciliation to the Group’s IFRS results can be found in the APMs section below.
Going concern
As described in the condensed consolidated interim financial statements, the Directors have formed a judgement, at the time of approving the condensed consolidated interim financial statements, that there are no material uncertainties that cast doubt on the Group’s ability to continue as a going concern and that they have a reasonable expectation that the Group has adequate resources to continue in operational existence for a period of at least 12 months from the date of signing these condensed consolidated interim financial statements. In making this judgement the Directors have considered the impacts of potential severe but plausible downsides that may affect the Group’s activities. For this reason the Directors have a reasonable expectation that the Group has sufficient resources to continue in operation over the going concern period and continue to adopt the going concern basis in preparing the condensed consolidated interim financial statements.
Responsibility statement
We confirm to the best of our knowledge that:
(a)
the condensed consolidated interim financial statements have been prepared in accordance with
(b) the 2025 Interim Results include a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
(c) the 2025 Interim Results include a fair review of the information required by DTR 4.2.8R (disclosure of related parties’ transactions and changes therein).
By order of the Board,
J. Fairbairn
B. Fidler
Chief Executive Officer Chief Financial Officer
Cautionary statement
These 2025 Interim Results have been prepared solely to provide additional information to shareholders to assess the Group’s strategies and the potential for those strategies to succeed. The 2025 Interim Results should not be relied on by any other party or for any other purpose.
These 2025 Interim Results contain certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this Report and such statements should be treated with caution due to the inherent uncertainties, including both uncertainties arising from economic and business risk factors, underlying any such forward looking information.
Independent review report to
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Bodycote plc’s condensed consolidated interim financial statements (the “interim financial statements”) in the 2025 Interim Results of
Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with
The interim financial statements comprise:
-- the Unaudited condensed consolidated interim balance sheet as at 30 June
2025 ;
-- the Unaudited condensed consolidated interim income statement and the
Unaudited condensed consolidated interim statement of comprehensive
income for the period then ended;
-- the Unaudited condensed consolidated interim cash flow statement for the
period then ended;
-- the Unaudited condensed consolidated interim statement of changes in
equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the 2025 Interim Results of
Basis for conclusion
We conducted our review in accordance with International Standard on Review Engagements (
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (
We have read the other information contained in the Interim Results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the Directors have inappropriately adopted the going concern basis of accounting or that the Directors have identified material uncertainties relating to going concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance with ISRE (
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the Directors
The 2025 Interim Results, including the interim financial statements, is the responsibility of, and has been approved by the Directors. The Directors are responsible for preparing the 2025 Interim Results in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom’s
Our responsibility is to express a conclusion on the interim financial statements in the 2025 Interim Results based on our review. Our conclusion, including our Conclusions relating to going concern, is based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report. This report, including the conclusion, has been prepared for and only for the Group for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom’s
Chartered Accountants
Unaudited condensed consolidated interim income statement
30 June 30 June
2025 2024
Note £m £m
Revenue 1 369.0 399.0
Cost of sales and overheads1 (320.2) (341.4)
Other operating income 2.5 2.1
Other operating expenses1 (0.6) (0.5)
Net impairment losses on financial assets (0.4) (0.1)
Operating profit before exceptional items 1 50.3 59.1
Exceptional items 2 (9.1) (28.3)
Operating profit 41.2 30.8
Finance income 0.2 0.4
Finance charges (4.8) (5.0)
Profit before taxation 36.6 26.2
Taxation charge 3 (8.6) (6.5)
Profit for the period 28.0 19.7
Attributable to:
Equity holders of the Parent 27.7 19.3
Non-controlling interests 0.3 0.4
28.0 19.7
Earnings per share 4
Pence Pence
Basic 15.5 10.2
Diluted 15.5 10.2
1
Excludes exceptional items. Total costs of sales and overheads, including exceptional items are £320.6m (
Unaudited condensed consolidated interim statement of comprehensive income
30 June 30 June
2025 2024
£m £m
Profit for the period 28.0 19.7
Items that may be reclassified subsequently to profit or loss:
Exchange losses on translation of overseas operations (27.1) (8.6)
Movements on hedges of net investments (3.2) 1.6
Movements on cash flow hedges 0.1 (0.1)
Total other comprehensive expense for the period (30.2) (7.1)
Total comprehensive (loss)/income for the period (2.2) 12.6
Attributable to:
Equity holders of the parent (2.1) 12.4
Non-controlling interests (0.1) 0.2
(2.2) 12.6
Unaudited condensed consolidated interim balance sheet
30 June 31 December
2025 2024
Note £m £m
Non-current assets
Goodwill 5 198.2 207.0
Other intangible assets 101.4 114.4
Property, plant and equipment 461.8 481.2
Right-of-use assets 50.9 56.4
Deferred tax assets 7.0 7.0
Trade and other receivables 2.7 2.8
822.0 868.8
Current assets
Inventories 28.3 28.1
Current tax assets 6.8 10.1
Trade and other receivables 152.7 141.3
Cash and bank balances 20.2 19.1
Assets held for sale 6 17.7 -
225.7 198.6
Total assets 1,047.7 1,067.4
Current liabilities
Trade and other payables 119.7 146.7
Current tax liabilities 29.4 32.2
Borrowings 8 132.7 87.4
Lease liabilities 12.6 13.1
Provisions 7 12.1 11.9
306.5 291.3
Net current liabilities (80.8) (92.7)
Non-current liabilities
Lease liabilities 45.2 50.4
Retirement benefit obligations 11.8 11.3
Deferred tax liabilities 39.9 41.2
Provisions 7 2.4 2.5
Other payables 0.9 0.8
100.2 106.2
Total liabilities 406.7 397.5
Net assets 641.0 669.9
Equity
Share capital 9 30.7 31.6
Share premium account 177.1 177.1
Own shares (6.5) (11.1)
Capital redemption reserve 132.2 131.3
Other reserves 4.9 10.0
Translation reserves 12.1 38.8
Retained earnings 288.9 290.4
Equity attributable to equity holders of the parent 639.4 668.1
Non-controlling interests 1.6 1.8
Total equity 641.0 669.9
Unaudited condensed consolidated interim cash flow statement
30 June 30 June
2025 2024
Note £m £m
Net cash from operating activities 11 65.8 71.7
Investing activities
Purchases of property, plant and equipment (38.0) (31.8)
Proceeds on disposal of property, plant and equipment and 0.4 0.4
right-of-use assets
Purchases of other intangible assets (0.6) (3.3)
Acquisition of businesses, net of cash acquired - (52.2)
Repayments of loans issued/(loans issued) 0.1 (0.6)
Interest received 0.2 0.4
Net cash used in investing activities (37.9) (87.1)
Financing activities
Interest paid (4.2) (4.2)
Dividends paid 10 (28.8) (30.2)
Principal elements of lease payments (6.8) (6.7)
Drawdown of bank loans 48.4 59.1
Repayments of bank loans (2.6) (0.6)
Ordinary shares purchased for share buyback (30.9) (25.8)
Net cash used in financing activities (24.9) (8.4)
Net increase/(decrease)in cash and cash equivalents 3.0 (23.8)
Cash and cash equivalents at beginning of year 16.0 44.7
Effect of foreign exchange rate changes (0.4) (0.5)
Cash and cash equivalents at end of period 11 18.6 20.4
Unaudited condensed consolidated interim statement of changes in equity
Equity
Share Share Own Capital Other Translation Retained attributable Non-controlling Total
capital premium shares redemption reserves reserves earnings to equity interests equity
account reserve holders of
the parent
£m £m £m £m £m £m £m £m £m £m
1 January 33.1 177.1 (15.6) 129.8 10.1 52.3 404.0 790.8 1.5 792.3
2024
Profit for - - - - - - 19.3 19.3 0.4 19.7
the year
Exchange
differences
on - - - - - (8.4) - (8.4) (0.2) (8.6)
translation
of overseas
operations
Movements on
hedges of net - - - - 1.6 - - 1.6 - 1.6
investments
Movements on
cash flow - - - - (0.1) - - (0.1) - (0.1)
hedges
Total
comprehensive - - - - 1.5 (8.4) 19.3 12.4 0.2 12.6
income for
the year
Ordinary
shares (0.6) - - 0.6 - - (30.2) (30.2) - (30.2)
acquired
Settlement of - - 3.2 - (3.5) - 0.3 - - -
share awards
Share-based - - - - 3.6 - - 3.6 - 3.6
payments
Deferred tax
on
share-based - - - - - - 0.1 0.1 - 0.1
payment
transactions
Dividends - - - - - - (30.1) (30.1) (0.1) (30.2)
30 June 2024 32.5 177.1 (12.4) 130.4 11.7 43.9 363.4 746.6 1.6 748.2
1 January 31.6 177.1 (11.1) 131.3 10.0 38.8 290.4 668.1 1.8 669.9
2025
Profit for - - - - - - 27.7 27.7 0.3 28.0
the year
Exchange
differences
on - - - - - (26.7) - (26.7) (0.4) (27.1)
translation
of overseas
operations
Movements on
hedges of net - - - - (3.2) - - (3.2) - (3.2)
investments
Movements on
cash flow - - - - 0.1 - - 0.1 - 0.1
hedges
Total
comprehensive - - - - (3.1) (26.7) 27.7 (2.1) (0.1) (2.2)
income for
the year
Ordinary
shares (0.9) - - 0.9 - - - - - -
acquired
Settlement of - - 4.6 - (4.1) - (0.5) - - -
share awards
Share-based - - - - 2.1 - - 2.1 - 2.1
payments
Dividends - - - - - - (28.7) (28.7) (0.1) (28.8)
30 June 2025 30.7 177.1 (6.5) 132.2 4.9 12.1 288.9 639.4 1.6 641.0
Other reserves include a share-based payments reserve of £3.6m (
The capital redemption reserve of £132.2m consists of £129.8m transferred from retained earnings on the conversion of B shares into deferred shares in 2008 and 2009 and £1.5m arising on the share buyback programme totalling £90m announced in
The own shares reserve represents the cost of shares in
Notes to the condensed consolidated interim financial statements
Basis of Preparation
The unaudited condensed consolidated interim financial statements of the Group have been prepared in accordance with
These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements for the year ended
The financial information set out above does not constitute statutory accounts as defined by section 434 of the
The Group’s operations are not significantly affected by seasonality.
Going concern
In adopting the going concern basis for preparing these unaudited condensed consolidated interim financial statements, the Directors have considered the Group’s business activities, together with the factors likely to affect its future development, performance and position. In addition, the Directors have considered its principal risks and uncertainties.
The Financial Review included in the 2025 Interim Results includes a summary of the Group’s financial position, cash flows, liquidity position and borrowings. The principal risks and uncertainties are set out on pages 28-33 of the 2024 Annual Report.
The Group has modelled a base case which reflects the Directors’ current expectations of future trading over the period ending
The base case scenario is built on the Group’s latest forecasts for 2025, extended to
The severe but plausible scenario assumes a significant decline in revenues across all of the Group’s revenue lines and is intended to reflect the potential effect of a sudden and severe economic downturn. Revenue in the downside scenario shows a 7% year on year decline in 2025 compared to 2024 followed by a further 10% year on year decline in 2026 compared to 2025. As a result total revenue in the downside scenario over the period is circa 16% lower than the base case. In mitigation of this severe sales decline, a 5% reduction in maintenance capex, and a 50% reduction in expansionary capex, compared to the base case has been assumed, together with a 10% cut in dividends compared to the base case.
In performing the assessment management considered both liquidity and compliance with the Group’s covenants. The key covenants attached to the Group’s Revolving Credit Facility relate to financial gearing (net debt to EBITDA) and interest cover, which are measured on a pre-IFRS 16 basis. The maximum financial gearing ratio permitted under the covenants is 3.0x (with a one-time acquisition spike at 3.5x) and the minimum interest cover ratio permitted is 4.0x. In both the base case and the severe but plausible downside scenario, the Group continues to maintain sufficient liquidity to meet its gearing and interest cover covenants under the Revolving Credit Facility with substantial headroom.
Management also performed a reverse stress test. This indicated that revenue in the second half of 2025 would need to decline by 26% compared to the base case, with a 33% decline in full year 2026 compared to the base case, and all other assumptions staying the same, to breach the Group’s loan covenants at
The Group meets its working capital requirements through a combination of committed and uncommitted facilities and overdrafts. For the purposes of the going concern assessment, the Directors have taken into account the capacity under existing committed facilities only, being predominantly the Group’s Revolving Credit Facility.
The Group has access to a £251.0m Revolving Credit Facility maturing in
In performing the assessment, the current and plausible impact of macro-economic factors, including tariffs, the ongoing wars in
After reviewing the current liquidity position, committed funding facilities, the base case and severe but plausible downside financial forecasts incorporating the uncertainties described above, the Directors have a reasonable expectation that the Group has sufficient resources to continue in operation over the going concern period. For these reasons the Directors continue to adopt the going concern basis of accounting in preparing the Interim financial statements.
Accounting policies
The same accounting policies, presentation and methods of computation have been followed in the condensed consolidated interim financial statements as were applied in the Group’s latest annual audited financial statements as detailed in the 2024 Annual Report, except for the tax charge for the interim period. The tax charge the Group has applied for the interim period is the forecast annual effective corporate income tax rate to the pre-tax income for the six-month period to determine the tax charge in accordance with IAS 34, Interim Financial Reporting.
The accounting policies have been applied consistently throughout the current period and preceding year. As described in note 5, the Group has changed the level at which goodwill is tested for impairment in response to changes to the Group’s structure and reporting.
Critical accounting judgments and significant accounting estimates
Preparing the condensed consolidated interim financial statements and applying the Group’s accounting policies requires management to make estimates and judgements that affect the amounts recognised in the condensed financial statements. Although the estimates and judgements are based on management’s best information about current circumstances and future events and actions, actual outcomes may differ which could result in material amounts being recorded in the income statement in future periods.
The Group’s latest annual audited financial statements set out the critical accounting judgements, significant accounting estimates and the other areas of judgement and accounting estimates that were made in preparing those financial statements.
The critical accounting judgements made in applying the Group’s accounting policies to these condensed consolidated interim financial statements relate to the recognition of tax provisions and the determination of which costs meet the definition of exceptional items. There have been no changes to these key sources of estimation uncertainty or these critical judgements since the year end and further details can be found in the Group accounting policies section of the 2024 Annual Report.
As described in the 2024 Annual Report the Group does not apply IAS 29 (Financial Reporting in Hyperinflationary Economies) to its operations in
The Group recognises climate change as a principal risk. As reported in the Group accounting policies section of the consolidated financial statements within the 2024 Annual Report, it is the Group’s view that climate change does not create any further material estimation uncertainty at this time.
Adoption of new, revised standards and interpretations applied in the current year
Lack of exchangeability (amendments to IAS 21) became applicable during the current reporting period. The amendment sets out how an entity determines whether a currency is exchangeable and how it determines an appropriate exchange rate when there is a lack of exchangeability. Adoption of the amendment has not had a material effect on the condensed consolidated interim financial statements.
New standards and interpretations not yet applied
At the date of authorisation of these condensed consolidated interim financial statements, the Group has not applied the following amendments to IFRS Standards that have been issued but are not effective until
-- Amendments to IFRS 9 and IFRS 7: Amendments to the Classification and
Measurement of Financial Instruments
-- Annual Improvements to IFRS Accounting Standards — Volume 11
The Group does not expect adoption of the amendments to have a material impact on the Group.
In addition, the Group has not adopted the following standards and interpretations that have been issued by the IASB but not yet endorsed for use in the
-- IFRS 18 Presentation and Disclosure in Financial Statements
-- Amendments to IFRS 9 and IFRS 7: Contracts referencing nature-dependant
electricity arrangements
Other than the potential disclosure and presentation changes required by IFRS 18, the amendments are not expected to have a material impact on the Group.
At the date of the approval of these condensed consolidated interim financial statements, there were no other new or revised IFRSs, amendments or interpretations in issue but not yet effective that are potentially material to the Group and which have not yet been applied.
In addition the
1. Business and geographical segments
The Group provides thermal processing services through a global footprint providing Specialist Technologies and Precision Heat Treatment thermal processing services. The Group organises its plants into three divisions:
Specialist Technologies : This division includes the Group’s Hot Isostatic Pressing (‘HIP’) business; its Speciality Stainless Steel Processes (S 3 P) business and its Surface Technology business.
Precision Heat Treatment : This division includes the Group’s business centred on the controlled heating and cooling of metals to obtain the desired mechanical, chemical and metallurgical properties for the end process. It also includes the Group’s Low Pressure Carburising and Corr-I-Dur processes.
Non-core : As a result of its strategic review carried out in 2024, the business identified a number of plants that form part of its strategic optimisation programme and are considered Non-core. These plants typically provide heat treatments services using older, less efficient and more carbon intensive technologies. The Group is managing these sites with a view to merging them with other plants in the portfolio, closing them, or selling them over the coming 18 months.
The Group’s Chief Executive Officer is considered to be the Chief Operating Decision Maker (‘CODM’) of the Group and reviews the results of each of the divisions on a monthly basis focussing on adjusted operating profit which is defined as operating profit before acquisition costs, amortisation of acquired intangibles and exceptional items. Accordingly, the three divisions outlined above are considered to be the Group’s Operating and Reportable segments as defined in IFRS 8 Operating Segments.
In determining the segments’ adjusted operating profit, the Group makes certain allocations of costs that are incurred centrally to benefit each of the segments. To the extent that these costs are of a nature that will continue to be incurred after the Group’s optimisation programme, announced in
Prior to the strategic review in the second half of 2024, the business presented its results split into six Operating Segments which were determined based on the geography of its plants and the preponderance of markets that they served. The prior year segmental analysis has been restated to present it on a consistent basis with the current year.
As the Group’s internal reporting had not been updated to reflect the expansion to the Optimise programme as at
Half year to 30 June 2025
Specialist Precision Central
Technologies Heat costs and Total core Non-core Total Group
Treatment eliminations
£m £m £m £m £m £m
Revenue 105.6 246.3 - 351.9 17.1 369.0
Result
Adjusted
operating 27.0 35.9 (8.6) 54.3 0.8 55.1
profit/
(loss)
Amortisation
of acquired (4.3) (0.5) - (4.8) - (4.8)
intangible
assets
Operating
profit/
(loss) 22.7 35.4 (8.6) 49.5 0.8 50.3
before
exceptional
items
Exceptional (0.1) (2.6) (1.2) (3.9) (5.2) (9.1)
items
Operating
profit/ 22.6 32.8 (9.8) 45.6 (4.4) 41.2
(loss)
Finance 0.2
income
Finance (4.8)
charges
Profit
before 36.6
taxation
Taxation (8.6)
Profit for 28.0
the period
Half year to 30 June 2024 (restated)
Specialist Precision Central
Technologies Heat costs and Total core Non-core Total Group
Treatment eliminations
£m £m £m £m £m £m
Revenue 116.3 258.3 - 374.6 24.4 399.0
Result -
Adjusted
operating 34.2 41.9 (10.2) 65.9 0.9 66.8
profit/
(loss)
Amortisation
of acquired (4.5) (0.6) - (5.1) (0.2) (5.3)
intangible
assets
Acquisition (2.4) - - (2.4) - (2.4)
costs
Operating
profit/
(loss) prior 27.3 41.3 (10.2) 58.4 0.7 59.1
to
exceptional
items
Exceptional - - (28.3) (28.3) - (28.3)
items
Operating
profit/ 27.3 41.3 (38.5) 30.1 0.7 30.8
(loss)
Finance 0.4
income
Finance (5.0)
charges
Profit
before 26.2
taxation
Taxation (6.5)
Profit for 19.7
the period
Inter-segment revenues are not material in either period.
The Group does not have any one customer that contributes more than 10% of revenue in either period.
Half year to 30 June 2025
Specialist Precision Heat Total core Non-core Total Group
Technologies Treatment
Revenue £m £m £m £m £m
Western Europe 52.8 121.9 174.7 8.0 182.7
North America 49.4 82.5 131.9 9.1 141.0
Emerging Markets 3.4 41.9 45.3 - 45.3
Group 105.6 246.3 351.9 17.1 369.0
Half year to 30 June 2024 (restated)
Specialist Precision Heat Total core Non-core Total Group
Technologies Treatment
Revenue £m £m £m £m £m
Western Europe 62.4 127.6 190.0 11.1 201.1
North America 49.9 87.8 137.7 13.3 151.0
Emerging Markets 4.0 42.9 46.9 - 46.9
Group 116.3 258.3 374.6 24.4 399.0
1. Exceptional items
The following items were charged to exceptional items:
30 June 30 June
2025 2024
£m £m
Impairment of ERP intangible asset: - 28.3
Strategic optimisation programme: 9.1 -
Impairment of assets 1.4 -
Severance and redundancy cost 2.8 -
Site closure and associated costs 4.5 -
Other programme costs 0.4 -
Total exceptional items 9.1 28.3
During 2024, the Group undertook a strategic review as a result of which it announced its intention to undertake a number of optimisation actions to drive step changes and improvements across the business, primarily centered on sites utilising older, more commoditised technologies, with higher carbon footprints. Implementation of the programme commenced in 2024 and will continue through 2025 and 2026. The Group has announced six site closures during the period, which together with related reductions in overhead positions, has resulted in an exceptional charge of £7.3m in the period ending
Included within the total charge of £9.1m are provisions of £3.0m (
In the period ending
3. Taxation charge
30 June 30 June
2025 2024
£m £m
Current taxation - charge for the period 8.7 13.1
Current taxation - adjustments in respect of previous years 0.1 (0.1)
Deferred tax - charge for the period (0.2) (6.5)
Total taxation charge 8.6 6.5
The adjusted rate of tax for the six months ended
The Group is subject to the OECD Pillar II GloBE Rules. The adoption of the Pillar II GloBE Rules by jurisdictions where Bodycote operates has not had a material impact on the Group’s current tax charge. The Group has applied the exception provided for by the amendments to IAS 12: Pillar II GloBE Rules to not recognise or disclose, information about deferred tax assets and liabilities related to those rules.
4. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
30 June 30
June
2025 2024
£m £m
Earnings
Earnings for the purpose of basic earnings per share being net 27.7 19.3
profit attributable to equity holders of the parent
Number of shares Weighted average number of ordinary shares for the 178,715,657 188,358,702 purpose of basic earnings per share Effect of dilutive potential ordinary shares: Shares subject to performance conditions 68,274 79,045 Shares subject to vesting conditions 204,808 474,116 Weighted average number of ordinary shares for the 178,988,739 188,911,863 purpose of diluted earnings per share
Pence Pence
Earnings per share:
Basic 15.5 10.2
Diluted 15.5 10.2
30 June 30 June
2025 2024
£m £m
Adjusted earnings
Profit attributable to equity holders of the parent 27.7 19.3
Add back:
Amortisation of acquired intangible assets (net of tax) 3.6 4.0
Acquisition costs (net of tax) - 1.8
Exceptional items (net of tax) 6.7 22.1
Adjusted earnings 38.0 47.2
Pence Pence
Adjusted earnings per share:
Basic 21.3 25.0
Diluted 21.2 25.0
As at
5.
30 June 31 December
2025 2024
£m £m
Cost
At 1 January 285.9 282.3
Exchange differences (8.7) (0.2)
Transfer to assets held for sale (2.0) -
Recognised on acquisition of businesses - 3.8
Total cost 275.2 285.9
Accumulated impairment
At 1 January 78.9 60.8
Impairment - 18.0
Exchange differences (1.9) 0.1
Total accumulated impairment 77.0 78.9
Carrying amount 198.2 207.0
The Group has determined its CGUs based on geography, customer groupings, and processes to reflect the lowest level at which the Group’s operations generate cash inflows that are largely separate to each other. Historically they have also formed the lowest level to which the Group has allocated goodwill and monitored it internally.
A number of changes in the Group’s management and operational structures took place in early 2025 as a result of the strategic review undertaken in 2024 and the Group’s internal reporting was further updated as a result of those changes. Accordingly, in the period ending
-- HIP
-- S3P
-- Surface Technology
-- Global Automotive and General Industrial (‘AGI’) excluding Emerging
Markets
-- Global Aerospace , Defence and Energy (‘ADE’)
-- Emerging Markets
The Group has therefore re-allocated the goodwill in the business to those six Group’s of CGUs and they formed the basis of its impairment indicator assessment at
30 June 31 December
2025 2024
£m £m
Specialist Technologies 44.7 47.2
Precision Heat Treatment 153.5 159.8
198.2 207.0
A summary of the goodwill allocated to each of the Group’s of CGUs is set out below:
Goodwill carrying value
2025
£m
Specialist technologies:
HIP 5.8
S3P -
Surface Technology 38.9
Precision Heat Treatment:
AGI 62.9
ADE 78.5
Emerging Markets 12.1
The Group performed an indictor assessment to determine whether an impairment test was required in respect of any of its groups of CGUs as at
Expected future cash flows are inherently uncertain and could change materially over time. They are affected by several factors, including market and production estimates, together with economic factors such as prices, discount rates, currency exchange rates, estimates of operational costs and future maintenance capital expenditure.
For more information of the 2024 impairment exercise including the sensitivity analysis performed refer to note 7 of the 2024 Annual Report.
6. Assets held for sale
Prior to
The Group believes that it is highly probable that these plants will be sold within the coming 12 months and that the group of sites are available for immediate sale in their present condition. These assets have been treated as a disposal group that is held for sale at that date. Refer also to note 14.
The assets held for sale are split between the Group’s operating segments as follows:
30 June 31 December
2025 2024
£m £m
Specialist Technologies - -
Precision Heat Treatment 11.9 -
Non-core 5.8 -
17.7 -
7. Provisions
Restructuring Environmental Legal Total
£m £m £m £m
At 1 January 2025 8.4 3.9 2.1 14.4
Additions 6.0 0.1 0.6 6.7
Released (0.2) - (0.2) (0.4)
Utlisation (5.0) (0.5) (0.2) (5.7)
Exchange difference (0.2) (0.3) - (0.5)
At 30 June 2025 9.0 3.2 2.3 14.5
Included in current liabilities 12.1
Included in non-current liabilities 2.4
14.5
Restructuring
Included in the restructuring provision is £6.0m (
Environmental
The Group provides for costs of environmental remediation if there is a probable outflow of economic resources that has been identified at the time of plant closure, as part of acquisition due diligence or in other circumstances where remediation by the Group is required. The provision is reviewed annually to determine the best estimate of expenditure required to settle the identified obligations and where applicable, external confirmations are obtained to determine the best estimate of future liabilities.
The Group remains exposed to contingent liabilities in respect of environmental remediation and could be subjected to regulatory or legislative requirements to remediate sites in the future (see note 13). However, it is not possible at this time to determine whether, and to what extent, any liabilities exist, other than for those recognised above. No provision has been recognised as at
Legal
Legal provisions include, but are not limited to, alleged breach of contract and alleged breach of environmental legislation. While the Group cannot predict the outcome of individual legal actions, provisions are recognised when the exposure can be reliably measured, and an outflow of economic benefits is considered probable following legal advice.
There were no individually material legal provisions recorded in the periods ending
8. Financial instruments
In accordance with IFRS 9, the Group categorises its financial instruments into those measured at ‘amortised cost’, ‘fair value through profit or loss’ and ‘fair value through other comprehensive income’.
The Group’s interest rate risk is primarily in relation to its floating rate borrowings (cash flow risk). From time to time the Group will use interest rate derivative contracts to manage its exposure to interest rate movements within Group policy. At
There have been no transfers of assets or liabilities between levels of the fair value hierarchy in the periods ending
The Group has access to a Revolving Credit Facility of £251.0m which is drawn in EUR. Certain EUR amounts are designated as net investment hedges to the Group’s subsidiaries with a matching functional currency on a 1:1 ratio.
As at
9. Share capital and reserves
Ordinary Shares Share Capital1
30 June 31 December 30 June 31 December
2025 2024 2025 2024
Number Number £m £m
At 1 January 182,897,496 191,456,172 31.6 33.1
Share buyback programme (5,418,788) (8,558,676) (0.9) (1.5)
Total 177,478,708 182,897,496 30.7 31.6
1 Nominal value of shares held is 17 3 / 11 p each.
In 2024 a share buyback programme totalling £90m was announced. The first tranche of the programme of £60m has completed with a total of 8,979,759 shares repurchased, including 421,083 purchased in 2025, for a total price, including transactional costs, of £60.4m, of which £2.7m was paid in cash in 2025. The extension of the programme £30m, announced in
As at
10. Dividends
2025 2024 2025 2024
Per share Per share £m £m
Proposed interim dividend for the year ended 31 6.9 6.9 12.2 12.8
December
Final dividend for the prior year ended 31 16.1 16.0 28.7 30.1
December
Total dividend 23.0 22.9 40.9 42.9
The Board approved the payment of an interim dividend for 2025 of 6.9p to those shareholders on the register of
Dividends payable to
non-controlling
interests were £0.1m (
11. Notes to the cash flow statement
30 June 30 June
2025 2024
£m £m
Profit for the year 28.0 19.7
Adjustments for:
Finance income (0.2) (0.4)
Finance charges 4.8 5.0
Taxation charge 8.6 6.5
Operating profit 41.2 30.8
Adjustments for:
Depreciation of property, plant and equipment 28.2 30.1
Depreciation of right-of-use assets 6.3 6.7
Amortisation of other intangible assets 5.4 6.2
Impairment of fixed assets - recognised in exceptional items 1.4 28.3
Impairment of property, plant and equipment and other assets - 0.1
recognised in operating profit
EBITDA 82.5 102.2
Share-based payments 2.1 3.6
Increase in inventories (1.2) (0.2)
Increase in receivables (11.2) (13.1)
Increase in payables 6.9 6.6
Increase/(decrease) in provisions 0.1 (6.8)
Cash generated by operations 79.2 92.3
Net income taxes paid (8.7) (19.0)
Net exchange differences (4.7) (1.6)
Net cash from operating activities 65.8 71.7
30 June 30 June
2025 2024
£m £m
Cash and cash equivalents comprise:
Cash and bank balances 20.2 21.7
Bank overdrafts (included in borrowings) (1.6) (1.3)
18.6 20.4
Cash and cash equivalents include £0.9m (
12. Related party transactions
There have been no material related party transactions since the last annual reporting period of
The notes to the consolidated financial statements in the 2024 Annual Report disclose information on the remuneration of the Board of Directors (note 28) who are considered key management personnel of the Group and information on defined benefit retirement pension schemes that the Group operates (note 26).
13. Contingent liabilities
The Group is subject to certain legal proceedings, claims, complaints and investigations arising out of the ordinary course of business. Legal proceedings may include, but are not limited to, alleged breach of contract and alleged breach of environmental, competition, securities and health and safety laws. The Group may not be insured fully, or at all, in respect of such risks. The Group cannot predict the outcome of individual legal actions, claims, complaints or investigations. The Group may settle litigation or regulatory proceedings prior to a final judgment or determination of liability. The Group may do so to avoid the cost, management efforts or negative business, regulatory or reputational consequences of continuing to contest the liability, even when it considers it has valid defences to liability. The Group considers that no material loss is expected to result from any legal proceedings, claims, complaints and investigations. Provision is made for all liabilities that are expected to materialise through legal and tax claims against the Group (see note 7).
14. Post balance sheet events
After the post balance date the Group has announced a further extension to the share buyback programme of £30.0m. No liability has been recognised in respect of this programme as there is no contractual liability as at
As described in note 6, prior to
Alternative performance measures (APMs) – unaudited
The 2025 Interim Results are prepared using the basis of preparation and accounting policies described in the 2024 Annual Report. To provide additional information and analysis and to enable a full understanding of the Group’s results, management also makes use of several APMs in its internal management of the business and as part of its internal and external reporting. These APMs are prepared and presented as described below:
Adjusted results (including adjusted operating profit; adjusted profit before tax; adjusted EBITDA; and adjusted tax charge) are defined as being the respective GAAP measure excluding the effect of exceptional items, acquisition costs and amortisation of acquired intangibles. These measures form the basis of the Group’s internal reporting and are presented to give greater insight into the ongoing trading performance of the Group excluding the effects of acquisitive activity and one-off items.
Constant currency results (including constant currency revenue and constant currency adjusted operating profit) present the 2025 results translated into GBP using the same exchange rates as were used in 2024. Constant currency results are intended to provide further insight into the ongoing trading performance of the business excluding the effects of foreign exchange movements that are beyond its control.
Organic results
(including organic revenue and organic adjusted operating profit)
present the results of the business stated at constant currency excluding the results of any businesses acquired or disposed of in either the current or prior year. Organic results are provided to give greater insight into the trading performance of the Group excluding the effects of changes in its composition. No businesses have been excluded from the organic results in the period to
EBITDA (Earnings before interest, taxation, depreciation and amortisation) is used by management to provide further information about the ability of its businesses to generate cash before working capital and other movements. EBITDA is stated before profits and losses on disposal of assets and impairment charges. A similar measure is used for the Group’s covenant calculation. A reconciliation of EBITDA to operating profit and cash generated by activities is included in note 11 of these condensed consolidated interim financial statements.
Core measures reflect the results of the Group’s two segments based on its technology based platforms. Those segments include the parts of the business that are expected to continue to exist once the Group’s strategic optimisation programme is complete and so give an indication of performance of the ongoing part of the Group.
Net Debt is defined as the Group’s borrowings (including finance lease liabilities) net of the Group’s cash and overdrafts balance. It is used to provide an overall picture of the net indebtedness of the Group.
Free cash flow is defined as the movement in the Group’s net debt excluding payments made to the Group’s shareholders in respect of dividends and share purchases, spend in relation to acquisitions of businesses and movements in net debt due to lease liability additions and disposals. It is presented to give an indication of the Group’s ability to generate cash to support acquisitive growth and return to shareholders.
Adjusted operating cashflow is defined as free cash flow adjusted to exclude the effects of payments in respect of exceptional items (typically restructuring payments), finance costs and net tax. Adjusted operating cashflow forms part of the basis of the Group’s internal reporting and is presented to give greater insight into the ongoing cash generation of the Group before financing costs and excluding the effects of acquisitions and one-off items. The definition of adjusted operating cashflow is consistent with the definition of the equivalent adjusted profit measures.
A reconciliation of each of the APMs to its nearest GAAP measure is set out below. Whilst broadly consistent with the treatment adopted by both the Group’s business sector peers and by other businesses outside of the Group’s business sector, these APMs are not necessarily directly comparable with those used by other companies.
Adjusted operating profit
Adjusted operating profit is reconciled to Operating Profit in note 1 to the condensed consolidated interim financial statements.
Adjusted operating margin
Half year to 30 June 2025
Specialist Precision Central cost
Technologies Heat and Total core Non-core Consolidated
Treatment eliminations
£m £m £m £m £m £m
Revenue 105.6 246.3 - 351.9 17.1 369.0
Adjusted
Operating 27.0 35.9 (8.6) 54.3 0.8 55.1
Profit
Adjusted
operating 25.6% 14.6% n/a 15.4% 4.7% 14.9%
margin (%)
Half year to 30 June 2024 (restated)
Precision Central cost
Specialist Heat Total core Non-core Consolidated
Technologies Treatment and
eliminations
£m £m £m £m £m £m
Revenue 116.3 258.3 - 374.6 24.4 399.0
Adjusted
Operating 34.2 41.9 (10.2) 65.9 0.9 66.8
Profit
Adjusted
operating 29.4% 16.2% n/a 17.6% 3.7% 16.7%
margin (%)
Adjusted profit before taxation
30 June 30 June
2025 2024
£m £m
Profit before taxation 36.6 26.2
Add back:
Amortisation of acquired intangibles 4.8 5.3
Acquisition costs - 2.4
Exceptional items 9.1 28.3
Adjusted profit before taxation 50.5 62.2
Revenue, organic revenue and adjusted operating profit at constant currency
Reconciled to revenue and adjusted operating profit in the table below:
Half year to 30 June 2025
Specialist Precision Central cost
Technologies Heat and Total core Non-core Consolidated
Treatment eliminations
£m £m £m £m £m £m
Organic 105.6 246.3 - 351.9 17.1 369.0
revenue
Constant
exchange 1.8 7.3 - 9.1 0.5 9.6
rates
adjustment
Organic
revenue at 107.4 253.6 - 361.0 17.6 378.6
constant
currency
Adjusted
operating 27.0 35.9 (8.6) 54.3 0.8 55.1
profit
Constant
exchange 0.5 1.3 0.1 1.9 0.1 2.0
rates
adjustment
Adjusted
operating
profit at 27.5 37.2 (8.5) 56.2 0.9 57.1
constant
currency
Half year to 30 June 2024 (restated)
Precision Central cost
Specialist Heat Total core Non-core Consolidated
Technologies Treatment and
eliminations
£m £m £m £m £m £m
Revenue at
constant 116.3 258.3 - 374.6 24.4 399.0
currency
Less
adjustments
from
disposals - - - - (2.1) (2.1)
completed
in the
prior year
Organic
revenue at 116.3 258.3 - 374.6 22.3 396.9
constant
currency
Adjusted
operating
profit at 34.2 41.9 (10.2) 65.9 0.9 66.8
constant
currency
Less
adjustments
from
disposals - - - - (0.3) (0.3)
completed
in the
prior year
Organic
adjusted
operating 34.2 41.9 (10.2) 65.9 0.6 66.5
profit at
constant
currency
Adjusted EBITDA (Earnings before Interest, Taxation, Depreciation, and Amortisation)
30 June 30 June
2025 2024
£m £m
EBITDA 82.5 102.2
Acquisition costs - 2.4
Exceptional items, excluding impairments 7.7 -
Adjusted EBITDA 90.2 104.6
Adjusted EBITDA Margin 24.4% 26.2%
Adjusted operating cash flow
30 June 30 June
2025 2024
£m £m
Adjusted EBITDA 90.2 104.6
Less:
Net capital expenditure (38.0) (34.6)
Principal elements of lease payments (6.8) (6.7)
Provisions movement (0.1) (6.4)
Working capital movement (7.6) (7.7)
Adjusted operating cash flow 37.7 49.2
Free cash flow
30 June 30 June
2025 2024
£m £m
Adjusted operating cash flow 37.7 49.2
Less:
Restructuring cash flows (7.0) (0.4)
Net income taxes paid (8.7) (19.0)
Net interest paid (4.0) (3.8)
Free cash flow 18.0 26.0
Adjusted operating cash conversion
30 June 30 June
2025 2024
£m £m
Adjusted operating cash flow 37.7 49.2
Adjusted operating profit 55.1 66.8
Adjusted operating cash conversion 68.4% 73.7%
Free cash flow conversion
30 June 30 June
2025 2024
£m £m
Free cash flow 18.0 26.0
Adjusted operating profit 55.1 66.8
Free cash flow conversion 32.7% 38.9%
Adjusted tax charge
30 June 30 June
2025 2024
£m £m
Tax charge 8.6 6.5
Tax on amortisation of acquired intangibles 1.2 1.3
Tax on acquisition costs - 0.6
Tax on exceptional items 2.4 6.2
Adjusted tax charge 12.2 14.6
Adjusted tax rate
30 June 30 June
2025 2024
£m £m
Adjusted tax charge 12.2 14.6
Adjusted profit before taxation 50.5 62.2
Adjusted tax rate 24.2% 23.5%
Adjusted earnings and adjusted earnings per share
A detailed reconciliation is provided in note 4 of these condensed consolidated interim financial statements.
Net debt excluding lease liabilities and net debt
30 June 31 December
2025 2024
£m £m
Cash and bank balances 20.2 19.1
Bank overdrafts (included in borrowings) (1.6) (3.1)
Bank loans (included in borrowings) (131.1) (84.3)
Net debt excluding lease liabilities (112.5) (68.3)
Lease liabilities (57.8) (63.5)
Net debt (170.3) (131.8)
Company information
Financial calendar
2025 interim dividend - record date
DRIP application deadline
2025 interim dividend - payment date
Results for 2025
Annual General Meeting
Final dividend for 2025
Half year results for 2026
Interim dividend for 2026
Shareholder enquiries
Enquiries on the following administrative matters can be addressed to the Company’s registrars at
• Change of address
• Stock transfer form including guidance notes
• Dividend mandates
• ShareGift donation coupon
Forms for these matters can be downloaded from the registrars’ website at: www.shareview.co.uk . Shareholders can also access and maintain their shareholding online by registering at www.shareview.co.uk . To register, shareholders will require their shareholder reference number.
Shareholder dealing service
For information on the share dealing service offered by
Dividend Reinvestment Plan
A Dividend Reinvestment Plan (“DRIP”) is provided by
General information
Copies of this Report and the 2024 Annual Report are available from the
Springwood Court
Springwood Close
SK10 2XF
Tel: +44 1625 505300
Email: info@bodycote.com
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