Good strategic progress in mixed markets
Adjusted1 Statutory
Group summary
Full year Full year Full year Full year
2025 2024 Change 2025 2024 Change
Revenue £727.1m £757.1m -4.0% £727.1m £757.1m -4.0%
Operating profit £114.3m £129.0m -11.4% £83.6m £37.9m +121%
Operating margin 15.7% 17.0% -130 bps 11.5% 5.0% +650 bps
Operating cash flow £88.6m £115.5m -23.3% £143.5m £152.6m -6.0%
Basic earnings per 44.4p 48.6p -8.6% 31.0p 10.8p +187%
share2
Full year ordinary 23.0p 23.0p -
dividend per share
Core summary1 Full year Full year Organic
2025 2024 Change
Revenue £671.6m £682.1m -0.3%
Adjusted operating profit £113.0m £125.5m -8.5%
Adjusted operating margin 16.8% 18.4%
Excludes Non-Core sites included in the Optimise programme; 2024 Core perimeter re-stated for enlarged programme announced in
Highlights
# Executing at pace on Optimise, Perform & Grow strategy to create a high-performing, resilient and faster growing Bodycote # Significant steps taken to improve the quality of the Group’s portfolio, including the disposal of ten Non-Core sites inFrance in 2025 and an Aerospace & Defence (A&D) acquisition inJanuary 2026 # Mixed market environment in FY25, with accelerating growth in A&D and Industrial Gas Turbines (IGT) while Oil & Gas demand slowed and Automotive and Industrial Markets remained challenging # Group revenue £727.1m (FY24: £757.1m) with Core revenue broadly stable organically (-0.3%); improved momentum in H2 (Core +3.2% year-on-year) # Adjusted operating profit of £114.3m (FY24: £129.0m), ~£4m Optimise savings partly offsetting fall in high-margin Oil & Gas revenue and challenging Automotive & Industrial environment # Statutory operating profit of £83.6m (FY24: £37.9m), driven by lower level of exceptional charges # Adjusted basic EPS of 44.4p (FY24: 48.6p), with lower profit partly offset by reduced share count; statutory EPS increased to 31.0p (FY24: 10.8p) due to higher statutory profit # New £80m share buyback announced, enabled by strong balance sheet; expected to be completed by the end of 2027 # Outlook: expect to deliver Core organic revenue growth, improved operating margins and further strategic progress in FY26; remain confident in delivering our medium-term financial targets
Commenting,
“2025 was a year of significant progress in executing our strategy, improving the quality of the Group’s portfolio and positioning us for growth. The Optimise programme is well underway and is delivering benefits in line with our expectations. We are continuing to invest in a number of organic growth projects in Specialist Technologies and in our faster-growing target end markets. I am pleased with the development of our M&A pipeline, and in early 2026 we completed the acquisition of Spectrum Thermal Processing, enhancing our A&D footprint in
“Market conditions were mixed in 2025, with continued challenges in Automotive and Industrial Markets partly offset by accelerating growth in Aerospace & Defence and Industrial Gas Turbines. Core organic revenue was broadly stable for the year but grew in the second half. Margins were impacted by mix headwinds and the low volume environment, partly offset by growing Optimise benefits.
“In 2026 we expect to deliver Core organic revenue growth, supported by continued strong demand in Aerospace & Defence and Industrial Gas Turbines. Reflecting the subdued economic backdrop, conditions in Automotive and Industrial Markets are expected to remain challenging in the near term, though we are well positioned to capitalise when demand recovers. We expect operating margins to improve in 2026, reflecting volume growth and further Optimise benefits. We are mindful of the current elevated geopolitical uncertainty and continue to monitor the situation closely. Our focus remains on delivering our strategy at pace and we are confident in the delivery of 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 current and prior periods. 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 Results (hereafter ‘Report’).
2 An earnings per share reconciliation is provided in note 6 to the consolidated financial statements.
END
Full Year Results Presentation
Bodycote will host an in-person presentation for investors and analysts at
Webcast: https://www.bodycote.com/webcast2025
Conference call details:
Participant Code: 899080
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 Chief Executive
Richard Mountain Ben Fidler , Chief Financial Officer
Edward Knight 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,
Full Year Commentary
Core overview
Core revenue was broadly stable for the year organically, down 0.3% to £671.6m (FY24: £682.1m), with a much improved year-on-year trend in the second half (+3.2%) compared with the first half (-3.5%). The end market environment was mixed, as growth accelerated through the year in A&D and IGT, while Oil & Gas demand softened and Industrial and Automotive conditions remained challenging. By division, growth in Precision Heat Treatment (+1.3% organic) was offset by a decline in Specialist Technologies (-3.7% organic), driven predominantly by lower Oil & Gas revenues including the previously announced impact of the end of a sizable contract in the
Core adjusted operating profit was £113.0m (FY24: £125.5m) with adjusted operating margins of 16.8% (FY24: 18.4%). The lower margins reflected a mix headwind from the decline in high-margin
Group overview
Including Non-Core businesses, total Group revenue was 4.0% lower at £727.1m (FY24: £757.1m). The year-on-year reduction reflected disposals and the closure and consolidation activity under the Optimise programme. Group adjusted operating profit was £114.3m (FY24: £129.0m), with adjusted operating margins of 15.7% (FY24: 17.0%), reflecting the reduced Core margins partly offset by the exit of low margin Non-Core sites.
Group statutory operating profit was £83.6m for the year (FY24: £37.9m), a significant year-on-year increase as the lower adjusted operating profit was more than offset by a reduced exceptional charge of £20.9m (FY24: £78.3m). The 2025 charge related solely to the Optimise programme, while 2024 was impacted by impairments of £46.4m and an Optimise charge of £31.9m.
Basic adjusted earnings per share were 44.4p (FY24: 48.6p). The movement reflected lower adjusted operating profit, partly offset by a c.5% reduction in the weighted average share count for the year as a result of the Group’s share buyback programme. The higher statutory operating profit resulted in an improved statutory earnings per share of 31.0p (FY24: 10.8p).
Adjusted operating cash flow was £88.6m (FY24: £115.5m), with cash conversion of 78% (FY24: 90%). This reflected a higher level of net capital expenditure, with increased investment to drive key organic growth initiatives. Free cash flow was £47.5m (FY24: £70.6m), driven primarily by the lower level of operating cash flow together with increased cash spend on the Optimise programme.
Closing net debt excluding lease liabilities increased to £104.8m (FY24: £68.3m), with leverage remaining low at approximately 0.6x net debt/EBITDA. The £36.5m increase in net debt reflected free cash flow of £47.5m, more than offset by close to £100m in shareholder returns comprising ordinary dividend payments of £40.9m and share buyback programme spend of £57.6m.
Divisional Performance
FY 2024 Organic
Specialist Technologies FY 2025 Change
(restated) Change
Revenue 212.3 222.3 -3.7% -4.5%
Adjusted operating profit 57.6 65.5 -12.1%
Adjusted operating margin 27.1% 29.5% -240bps
FY 2024 Organic
Precision Heat Treatment FY 2025 Change
(restated) Change
Revenue 459.3 459.8 +1.3% -0.1%
Adjusted operating profit 73.7 80.4 -8.3%
Adjusted operating margin 16.0% 17.5% -150bps
FY 2024 Organic
Non-Core FY 2025 Change
(restated) Change
Revenue 55.5 75.0 -28.0% -26.0%
Adjusted operating profit 1.3 3.5 -62.9%
Adjusted operating margin 2.3% 4.7% -240bps
Specialist Technologies
revenue declined by 3.7% organically to £212.3m (FY24: £222.3m). The decline in revenue included a c.40% reduction in Oil & Gas revenue, reflecting both the previously disclosed end of a significant customer project and soft overall market demand, particularly in the
Precision Heat Treatment
revenue grew by 1.3% organically to £459.3m (FY24: £459.8m). There was strong growth in IGT, while A&D growth accelerated in the second half (after a stable first half) as supply chain conditions improved materially. The Automotive and Industrial market environment remained challenging in both
Strategic progress: Optimise, Perform, Grow
We continued to execute at pace on our strategy in 2025, with important milestones achieved across all three pillars. We remain confident in delivering on our medium-term targets and in creating a high-performing, more resilient and faster growing Bodycote.
Optimise:
we are now well progressed with the execution of the Optimise programme, with increasing run-rate benefits being delivered. In
Perform:
in 2025 we completed our Perform pilot programme, which validated the benefits from rolling out operational excellence tools to our plant network. Substantial benefits were seen across the pilot sites, which comprised around 10% of the Group’s portfolio. At one Aerospace & IGT focused site in
Grow:
we have taken a number of steps towards accelerating growth in our target high-growth, high-margin areas. First, following a detailed review of our commercial capability, we reorganised our sales structure from divisional silos into global, end market-focused teams. We also strengthened our business development capability and updated our sales incentives to ensure they aligned with our strategy. Secondly, to better leverage our global footprint we have increased the emphasis on cross-selling and collaboration, including selective use of key account management and the establishment of a small number of cross-divisional working groups, focused on target markets (e.g. European Defence). These efforts have yielded encouraging early results, including a significant expansion of our Defence order pipeline in
Capital allocation
Our strong balance sheet enables us to take a balanced and disciplined approach to capital allocation, focused on improving the quality of the Group’s portfolio, driving profitable growth and delivering sustainable shareholder returns. This was evidenced in 2025 by the successful recycling of capital from Non-Core areas (including £19m disposal proceeds) towards targeted growth investment including £77m in capital expenditure. We continue to build our M&A pipeline, which has begun to yield results with the purchase of Spectrum Thermal Processing in
Sustainability
We continue to focus on sustainability as an enabler of our strategy, both through reducing our internal energy usage and as an accelerator of our revenue growth. In terms of our own operations, since 2019 we have delivered a 27% improvement in our energy intensity (kWh of energy consumed per £ of revenue generated). We also made further progress towards our SBTi emissions target of a 46% reduction in Scope 1 and 2 emissions by 2030, having now delivered a 38% reduction versus our 2019 base year. We continue to develop our lower-carbon service offerings: in 2025, we announced new zero-emissions sites at
Outlook
We expect to deliver Core organic revenue growth in 2026, led by continued strong demand in A&D and IGT. Reflecting the subdued economic backdrop, conditions in Automotive and Industrial Markets are likely to remain challenging in the near term, though we are well positioned to capitalise when demand recovers. We expect operating margins to improve in 2026, reflecting volume growth and further Optimise benefits, partly offset by a normalisation of variable remuneration which has been lower than usual in 2024 and 2025. We are mindful of the current elevated geopolitical uncertainty and continue to monitor the situation closely. Our focus remains on executing our strategy at pace and we are confident in the delivery of our medium term targets.
Chief Financial Officer’s Review
“Despite mixed end-market conditions, our core revenue remained stable and we made significant progress on our efforts to improve the quality of the Group’s portfolio. Margins were impacted by reduced Oil & Gas work offset by starting to see the benefit of our Optimise savings.”
Chief Financial Officer
Financial overview
2025 2024
£m £m
Revenue 727.1 757.1
Adjusted operating profit 114.3 129.0
Exceptional items (20.9) (78.3)
Amortisation of acquired intangible assets (9.7) (10.4)
Acquisition costs (0.1) (2.4)
Operating profit 83.6 37.9
Net finance charge (9.1) (9.5)
Profit before taxation 74.5 28.4
Taxation charge (19.1) (7.7)
Profit for the year 55.4 20.7
Group revenue decreased by 4.0% to £727.1m (2024: £757.1m) at actual exchange rates and 2.8% at constant currency. The fall in revenue reflected a £19.5m reduction in our non-core segment as we continued to execute our Optimise strategy at pace and exit non-core sites. Reflecting mixed end market conditions, at constant FX rates our core business revenue of £671.6m (2024: £682.1m) was broadly stable, down 0.3%.
Adjusted operating profit decreased by 11.4% to £114.3m (2024: £129.0m), down 10.0% at constant currency, reflecting the fall in high-margin Oil & Gas revenue in the year and a challenging Automotive & Industrial environment, partly offset by the benefit of £4m of savings delivered through our Optimise programme.
These trends resulted in a reduction in Adjusted Operating Profit margin of 130bps to 15.7% (2024: 17.0%).
Statutory operating profit increased to £83.6m (2024: £37.9m) after a reduced charge of £20.9m (2024: £78.3m) for exceptional items (see below).
Exceptional items
In 2024 the Group announced the Optimise programme which is designed to enhance the quality of the Group’s portfolio. The programme is focused on closing and consolidating a set of ‘Non-Core’ sites as well as delivering overhead savings. The Non-Core sites operate in challenging end markets and regions, as well as typically utilising older and more commoditised technologies with higher carbon footprints. The programme was extended in 2025 to a total of 31 sites. Of this total, eight sites have now been fully closed and in
Exceptional items for the year were £20.9m (2024: £78.3m) and solely reflected the Group’s Optimise programme (2024: £31.9m related to the Optimise programme, £18.0m related to goodwill impairment and £28.4m ERP impairment).
Further detail can be found in note 3 to the financial statements.
Net finance charge
The net finance charge reduced to £9.1m (2024: £9.5m), as summarised in the table below:
2025 2024
£m £m
Interest on loans and bank overdrafts (3.7) (3.9)
Lease and other interest charges (2.6) (3.0)
Finance and bank charges (3.2) (3.4)
Total finance charges (9.5) (10.3)
Interest received 0.4 0.8
Net finance charge (9.1) (9.5)
The decrease in net finance charges during the year was driven primarily by lower lease interest as leases were exited as part of actions resulting from the Optimise programme.
Profit before taxation
2025 2024
£m £m
Adjusted profit before taxation 105.2 119.5
Exceptional items (20.9) (78.3)
Amortisation of acquired intangible assets (9.7) (10.4)
Acquisition costs (0.1) (2.4)
Profit before taxation 74.5 28.4
Adjusted profit before tax was £105.2m (2024: £119.5m) at actual exchange rates, driven by the reduction in adjusted operating profit described above. Statutory profit before taxation increased to £74.5m (2024: £28.4m) reflecting the reduced impact of exceptional charges of £20.9m (2024: £78.3m), as well as a fall in acquisition costs due to reduced acquisition activity in the year.
Taxation
The tax charge for the year was £19.1m (2024: £7.7m). Before accounting for amortisation of acquired intangibles, acquisition costs and exceptional items, the adjusted tax rate for the Group was 24.9% (2024: 23.8%). The Group’s overall tax rate reflects the blended average of the tax rates in the jurisdictions around the world in which the Group trades and generates profit and so is impacted by changes to the mix of profit generation. Looking ahead, the adjusted tax rate is expected to moderately increase over the mid-term, reflecting the expected growth in different geographies.
The effective statutory tax rate was 25.6% (2024: 27.1%) with the decrease primarily due to the exceptional goodwill impairment in 2024 not being deductible for tax. Provisions of £23.8m (2024: £24.9m) are carried in respect of potential future tax assessments related to ‘open’ historical tax years. Note 5 of the consolidated financial statements provides more information.
The OECD Pillar II Rules for a global minimum tax rate have been applicable to the Group from
Pension scheme
In
Return on capital employed
Return on capital employed decreased by 150bps in the year to 14.2% from 15.7% in 2024. The decrease was driven by the 130bps reduction in adjusted operating profit margins, with capital employed being broadly stable.
Earnings per share
Basic adjusted earnings per share decreased 8.6% to 44.4p (2024: 48.6p), reflecting the lower operating profit, partly offset by the impact of the share buyback programme. Basic statutory earnings per share for the year increased to 31.0p (2024: 10.8p), reflecting the lower level of exceptional charges recorded in the year. See note 6 of the consolidated financial statements for further details of these calculations.
2025 2024
£m £m
Profit for the year 55.4 20.7
Attributed to non-controlling interests 0.5 0.7
Earnings attributable to equity 54.9 20.0
holders of the parent
Weighted average number of 176,816,708 186,012,493
ordinary shares in issue
Basic adjusted EPS 44.4 48.6
Basic EPS 31.0 10.8
Capital expenditure
Total capital expenditure in the year was £77.0m (2024: £60.5m). The increase year-on-year was driven by increased investment in key growth and modernisation projects, alongside a lower level of PP&E disposals. The Group remains committed to maintaining its assets to the highest standards of quality and safety whilst maintaining good discipline around its capital expenditure.
Management cash flow
2025 2024
£m £m £m
Adjusted operating profit 114.3 129.0
Depreciation and amortisation 70.8 75.3
Other, including impairment and profit on disposal of PPE (0.4) (5.6)
Adjusted EBITDA1 184.7 198.7
Net capital expenditure (77.0) (60.5)
Principal elements of lease payments (13.8) (13.5)
Provisions movement 0.4 (7.3)
Net working capital movement (5.7) (1.9)
Adjusted operating cash flow 88.6 115.5
Restructuring (14.3) (3.9)
Net finance costs (8.2) (8.9)
Net tax payments (18.6) (32.1)
Free cash flow 47.5 70.6
Net lease liability additions and disposals 2.7 (0.7)
Ordinary dividend (40.9) (42.9)
Net disposal/(acquisition) cash flow 17.5 (55.6)
Ordinary shares purchased for share buyback programme (57.6) (57.7)
Own shares purchased less share-based payments 3.4 0.6
Increase in net debt (27.4) (85.7)
Opening net debt (131.8) (51.7)
Foreign exchange movements (6.4) 5.6
Closing net debt (165.6) (131.8)
Lease Liabilities 60.8 63.5
Net debt excluding lease liabilities (104.8) (68.3)
1 Refer to page 194 and note 22 of the 2025 Annual Report for a reconciliation of Adjusted EBITDA to EBITDA and note 22 of the 2025 Annual Report for a reconciliation of operating profit to EBITDA.
Adjusted operating cash flow decreased to £88.6m (2024: £115.5m) as a result of decreased operating profit and higher capital spend as the Group has begun investment in key growth initiatives. Operating cash conversion fell to 78% (2024: 90%), principally due to the increased capex investment.
Free cash flow fell to £47.5m (2024: £70.6m) for the year principally due to the reduced adjusted operating cash flow as well as increased cash outflows in respect of the Optimise programme, partly offset by reduced tax outflows. The statutory measure, net cash from operating activities, fell to £143.5m (2024: £152.6m) as the lower profit was partly offset by decreased cash tax outflows.
Closing net debt was £165.6m (2024: £131.8m) and £104.8m (2024: £68.3m) excluding lease liabilities, representing a net debt/adjusted EBITDA ratio of 0.6x.
Dividend and dividend policy
The Group has a 38-year track record of growing or maintaining the dividend and aims to pay ordinary dividends so that cover will be at or above 2.0x earnings on a ‘normalised’ multi-year basis.
In line with this policy, the Board has recommended a final dividend of 16.1p (2024: 16.1p), bringing the full year dividend to 23.0p (2024: 23.0p). The interim dividend of 6.9p was paid on
Borrowing facilities
During the year the Group exercised an option to extend the maturity date of its Revolving Credit Facility (‘RCF’) to
Facility Facility utilisation Facility headroom
£m £m £m
Revolving Credit Facility 251.0 129.2 121.8
In addition to the Revolving Credit Facility, the Group also has access to additional committed facilities of £9.2m and cash of £25.2m, taking total committed facility headroom to £156.2m at
Alternative performance measures
To provide additional information and analysis and to enable a full understanding of the Group’s results, management makes use of a number of APMs in its internal management of the business and as part of its internal and external reporting. Definitions of these alternative performance measures, the reasons why they are used, along with reconciliations to equivalent IFRS measures can be found in the 2025 Annual Report.
Going concern
The Directors have formed a judgement, at the time of approving the financial statements, that there are no material uncertainties that cast doubt on the Group’s going concern status and that they have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least the next 12 months. In making this judgement, they have considered the impacts of potential severe but plausible consequences arising from the Group’s activities. For this reason, the Directors continue to adopt the going concern basis in preparing the consolidated financial statements.
Directors’ responsibilities statement
This responsibilities statement has been prepared in connection with the Group consolidated financial statements,
extracts of which are included within this announcement. The Directors confirm that to the best of their knowledge:
-- The condensed consolidated financial statements included in this
document are derived from the audited consolidated financial statements
of the Group, prepared in accordance with UK -adopted international
accounting standards (they do not contain sufficient information to
comply with UK -adopted international accounting standards);
-- The Group's consolidated financial statements, prepared in accordance
with UK -adopted international accounting standards, give a true and fair
view of the assets, liabilities, financial position, cash flows and
profit of the Group;
-- There have been no significant individual related party transactions
during the year;
-- There have been no significant changes in the Group's related party
relationships from that reported in the half-yearly results for the six
months ended 30 June 2025 ; and
-- The Strategic Report includes a fair review of the development and
performance of the business and the position of the Group, together with
a description of the principal risks and uncertainties that it faces.
In the case of each Director in office at the date the Directors’ Report is approved:
-- So far as the Director is aware, there is no relevant audit information
of which the Group’s auditors are unaware; and
-- They have taken all steps that they ought to have taken as a Director in
order to make themselves aware of any relevant audit information and to
establish that the Group’s or Company’s auditor are aware of that
information.
The Group's consolidated financial statements, and related notes, including this responsibilities statement, were
approved by the Board and authorised for issue on
By order of the Board,
Director Director
Audited financial information
The condensed consolidated financial statements and notes 1 to 12 for the year ended
below are derived from the Group’s consolidated financial statements which have been audited by
Consolidated income statement
For the year ended
2025 2024
Note £m £m
Revenue 1 727.1 757.1
Cost of sales and overheads1 2 (627.0) (647.8)
Other operating income1 2 6.5 9.7
Other operating expenses1 2 (0.7) (0.4)
Net impairment losses on financial assets1 (1.4) (2.4)
Operating profit before exceptional items 1,2 104.5 116.2
Exceptional items 3 (20.9) (78.3)
Operating profit 2 83.6 37.9
Finance income 0.4 0.8
Finance charges (9.5) (10.3)
Profit before taxation 74.5 28.4
Taxation charge 4 (19.1) (7.7)
Profit for the Year 55.4 20.7
Attributable to:
Equity holders of the Parent 54.9 20.0
Non-controlling interests 0.5 0.7
55.4 20.7
Earnings per share 5 Pence Pence
Basic 31.0 10.8
Diluted 31.0 10.7
1 Excludes exceptional items. Total cost of sales and overheads including exceptional items are £627.8m (2024: £648.5m), other operating income including exceptional items are £8.6m (2024: £9.7m), other operating expenses including exceptional items are £23.0m (2024: £77.7m), and net impairment losses on financial assets are £1.3m (2024: £2.7m).
Consolidated statement of comprehensive income
For the year ended
2025 2024
£m £m
Profit for the Year 55.4 20.7
Items that will not be reclassified to profit or loss:
Actuarial gains/(losses) on defined benefit pension schemes 1.4 (0.3)
Tax on retirement benefit obligations that will not be - (0.1)
reclassified
Total items that will not be reclassified to profit or loss 1.4 (0.4)
Items that may be reclassified subsequently to profit or loss:
Exchange losses on translation of overseas operations (10.5) (13.8)
Movements on hedges of net investments (6.9) 4.1
Movements on cash flow hedges 0.1 (0.1)
Total items that may be reclassified subsequently to profit or (17.3) (9.8)
loss
Total other comprehensive expense for the year (15.9) (10.2)
Total comprehensive income for the year 39.5 10.5
Attributable to:
Equity holders of the parent 39.5 10.1
Non-controlling interests - 0.4
39.5 10.5
Consolidated balance sheet
For the year ended
2025 2024
Note £m £m
Non-current assets
Goodwill 6 200.5 207.0
Other intangible assets 99.2 114.4
Property, plant and equipment 477.7 481.2
Right-of-use assets 54.3 56.4
Deferred tax assets 3.4 7.0
Trade and other receivables 2.6 2.8
837.7 868.8
Current assets
Inventories 28.7 28.1
Current tax assets 13.0 10.1
Trade and other receivables 145.2 141.3
Cash and bank balances 25.2 19.1
212.1 198.6
Assets held for sale 3.8 -
Total assets 1,053.6 1,067.4
Current liabilities
Trade and other payables 122.2 146.7
Current tax liabilities 4 34.3 32.2
Borrowings (restated)1 0.8 3.1
Lease liabilities 13.6 13.1
Provisions 13.1 11.9
184.0 207.0
Net current assets/(liabilities)1 28.1 (8.4)
Non-current liabilities
Borrowings (restated)1 129.2 84.3
Lease liabilities 47.2 50.4
Retirement benefit obligations 10.3 11.3
Deferred tax liabilities 38.6 41.2
Provisions 7 2.2 2.5
Other payables 0.2 0.8
227.7 190.5
Total liabilities 411.7 397.5
Net assets 641.9 669.9
Equity
Share capital 8 30.0 31.6
Share premium account 177.1 177.1
Own shares (6.5) (11.1)
Translation reserves 28.8 38.8
Other reserves 135.5 141.3
Retained earnings 275.3 290.4
Equity attributable to equity holders of the parent 640.2 668.1
Non-controlling interests 1.7 1.8
Total equity 641.9 669.9
1 In 2025 the Group reclassified its Revolving Credit Facility liability to present it as a non-current liability. See note 15 of the 2025 Annual Report for details.
Consolidated cash flow statement
For the year ended
2025 2024
Note £m £m
Net cash from operating activities 10 143.5 152.6
Investing activities
Purchases of property, plant and equipment (76.4) (70.1)
Proceeds on disposal of property, plant and equipment 4.7 13.4
Purchases of other intangible assets (2.1) (4.1)
Acquisition of businesses, net of cash acquired - (52.2)
Net proceeds on disposal of business 3 17.6 0.4
Repayments of loans issued/(loans issued) 0.2 (1.0)
Interest received 0.4 0.8
Net cash used in investing activities (55.6) (112.8)
Financing activities
Interest paid (8.6) (9.7)
Dividends paid 9 (40.9) (42.9)
Principal elements of lease payments (13.8) (13.5)
Drawdown of bank loans 53.6 75.2
Repayments of bank loans (12.3) (19.0)
Ordinary shares purchased for share buyback 8 (57.6) (57.7)
Net cash used in financing activities (79.6) (67.6)
Net increase/(decrease) in cash and cash equivalents 8.3 (27.8)
Cash and cash equivalents at beginning of year 16.0 44.7
Effect of foreign exchange rate changes 0.1 (0.9)
Cash and cash equivalents at end of year 10 24.4 16.0
Consolidated statement of changes in equity
For the year ended
Equity
Share Share Own Translation Other Retained attributable Non-controlling Total
capital premium shares reserves reserves earnings to equity interests equity
account holders of
the parent
£m £m £m £m £m £m £m £m £m
1 January 33.1 177.1 (15.6) 52.3 139.9 404.0 790.8 1.5 792.3
2024
Profit for - - - - - 20.0 20.0 0.7 20.7
the year
Exchange
differences
on - - - (13.5) - - (13.5) (0.3) (13.8)
translation
of overseas
operations
Movements on
hedges of net - - - - 4.1 - 4.1 - 4.1
investments
Movements on
cash flow - - - - (0.1) - (0.1) - (0.1)
hedges
Actuarial
losses on
defined
benefit - - - - - (0.4) (0.4) - (0.4)
pension
schemes net
of deferred
tax
Total
comprehensive - - - (13.5) 4.0 19.6 10.1 0.4 10.5
income for
the year
Ordinary
shares (1.5) - - - 1.5 (90.6) (90.6) - (90.6)
acquired
Settlement of - - 4.5 - (4.7) 0.2 - - -
share awards
Share-based - - - - 0.6 - 0.6 - 0.6
payments
Dividends - - - - - (42.8) (42.8) (0.1) (42.9)
31 December 31.6 177.1 (11.1) 38.8 141.3 290.4 668.1 1.8 669.9
2024
Profit for - - - - - 54.9 54.9 0.5 55.4
the year
Exchange
differences
on - - - (10.0) - - (10.0) (0.5) (10.5)
translation
of overseas
operations
Movements on
hedges of net - - - - (6.9) - (6.9) - (6.9)
investments
Movements on
cash flow - - - - 0.1 - 0.1 - 0.1
hedges
Actuarial
gains on
defined
benefit - - - - - 1.4 1.4 - 1.4
pension
schemes net
of deferred
tax
Total
comprehensive - - - (10.0) (6.8) 56.3 39.5 - 39.5
income for
the year
Ordinary
shares (1.6) - - - 1.6 (30.0) (30.0) - (30.0)
acquired
Settlement of - - 4.6 - (4.0) (0.6) - - -
share awards
Share-based - - - - 3.4 - 3.4 - 3.4
payments
Dividends - - - - - (40.8) (40.8) (0.1) (40.9)
31 December 30.0 177.1 (6.5) 28.8 135.5 275.3 640.2 1.7 641.9
2025
The own shares reserve represents the cost of
Notes to the consolidated financial statements
Year ended 31 December 2025
General information
Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates. These condensed consolidated financial statements are presented in pounds sterling, which is the functional and presentation currency of the Parent Company. Foreign operations are included in accordance with the policies set out in the Foreign Currencies accounting policy in the 2025 Annual report.
Basis of preparation and non-statutory financial statements
The financial statements of the Group, from which these condensed consolidated financial statements are derived, have been prepared in accordance with
The financial information set out above does not constitute the Company's statutory accounts for the years ended
1. Segmental analysis
The Group has 136 operational locations across the world providing a range of market sectors with thermal processing services. It 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:
The Group has identified a number of plants that form part of its Optimisation programme and are considered non-core. These plants typically provide heat treatment 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 plants, or selling them over the coming 24 months. In
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 focusing 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 has been completed, they are not allocated to the non-core segment.
As described above, during 2025 the Group expanded its Optimisation programme (“Optimise”) to include a further 13 plants. At the same time, actions at one site that had been part of the Optimisation programme resulted in its removal from the programme. Consequently the prior year segmental analysis has been restated to reflect the updated Optimisation programme and the way that the Group is now viewed by the CODM.
2025
Specialist Precision Central
Technologies Heat costs and Total core Non-core Total Group
Treatment eliminations
£m £m £m £m £m £m
Revenue 212.3 459.3 - 671.6 55.5 727.1
Result
Adjusted
operating 57.6 73.7 (18.3) 113.0 1.3 114.3
profit/
(loss)
Amortisation
of acquired (8.6) (1.1) - (9.7) - (9.7)
intangible
assets
Acquisition - - (0.1) (0.1) - (0.1)
costs
Operating
profit/
(loss) 49.0 72.6 (18.4) 103.2 1.3 104.5
before
exceptional
items
Exceptional (0.9) (3.7) (0.3) (4.9) (16.0) (20.9)
items
Operating
profit/ 48.1 68.9 (18.7) 98.3 (14.7) 83.6
(loss)
Finance 0.4
income
Finance (9.5)
charges
Profit
before 74.5
taxation
Taxation (19.1)
Profit for 55.4
the Year
2024 restated
Specialist Precision Central
Technologies Heat costs and Total core Non-core Total Group
Treatment eliminations
£m £m £m £m £m £m
Revenue 222.3 459.8 - 682.1 75.0 757.1
Result
Adjusted
operating 65.5 80.4 (20.4) 125.5 3.5 129.0
profit/
(loss)
Amortisation
of acquired (8.7) (1.7) - (10.4) - (10.4)
intangible
assets
Acquisition (2.4) - - (2.4) - (2.4)
costs
Operating
profit/
(loss) prior 54.4 78.7 (20.4) 112.7 3.5 116.2
to
exceptional
items
Exceptional (1.4) (24.4) (30.7) (56.5) (21.8) (78.3)
items
Operating
profit/ 53.0 54.3 (51.1) 56.2 (18.3) 37.9
(loss)
Finance 0.8
income
Finance (10.3)
charges
Profit
before 28.4
taxation
Taxation (7.7)
Profit for 20.7
the Year
The segmental analysis has been restated to reflect the expansion of the Optimise programme in
Inter-segment revenues are not material in either year.
The Group does not have any one customer that contributes more than 10% of revenue in either year.
2025
Specialist Precision Heat Total core Non-core Total Group
Technologies Treatment
Revenue £m £m £m £m £m
Western Europe 105.1 215.4 320.5 40.2 360.7
North America 100.0 162.0 262.0 14.2 276.2
Emerging Markets 7.2 81.9 89.1 1.1 90.2
Group 212.3 459.3 671.6 55.5 727.1
2024 restated
Specialist Precision Heat Total core Non-core Total Group
Technologies Treatment
Revenue £m £m £m £m £m
Western Europe 119.1 211.2 330.3 50.9 381.2
North America 95.7 165.7 261.4 23.0 284.4
Emerging Markets 7.5 82.9 90.4 1.1 91.5
Group 222.3 459.8 682.1 75.0 757.1
Other information
2025
Specialist Precision Central
Technologies Heat costs and Total core Non-core Total Group
Treatment eliminations
£m £m £m £m £m £m
Gross
capital 23.2 59.3 4.4 86.9 4.4 91.3
additions
Depreciation
and 23.3 48.6 3.0 74.9 5.6 80.5
amortisation
Impairments - (0.3) 0.3 - 3.7 3.7
2024 restated
Specialist Precision Central
Technologies Heat costs and Total core Non-core Total Group
Treatment eliminations
£m £m £m £m £m £m
Gross
capital 18.7 57.9 5.2 81.8 8.2 90.0
additions
Depreciation
and 23.5 48.7 3.8 76.0 9.7 85.7
amortisation
Impairments 0.8 23.1 28.4 52.3 13.0 65.3
Geographical information
The Group’s revenue from external customers analysed by country in which the service is delivered is detailed below:
2025 2024
Revenue £m £m
USA 260.8 271.2
France 95.9 104.2
Germany 69.9 72.3
UK 65.2 68.5
Sweden 45.1 50.3
Netherlands 31.3 29.5
Mexico 25.0 24.7
China 20.5 20.4
Canada 15.4 13.2
Poland 13.3 12.8
Czech Republic 13.2 12.9
Italy 12.5 15.7
Finland 11.1 10.2
Turkey 10.6 11.1
Other countries less than £10m revenue 37.3 40.1
Group 727.1 757.1
2. Operating profit
2025 2024
£m £m
Revenue 727.1 757.1
Cost of sales (446.3) (460.4)
Gross profit 280.8 296.7
Selling costs (22.0) (22.3)
Administration expenses (158.7) (165.1)
Other operating income 6.5 9.7
Other operating expenses (0.7) (0.4)
Net impairment losses on financial assets (1.4) (2.4)
Operating profit before exceptional items 104.5 116.2
Exceptional items (note 3) (20.9) (78.3)
Operating profit 83.6 37.9
Operating profit for the year has been arrived at after charging/(crediting):
2025 2024
£m £m
Within operating profit before exceptional items:
Employee costs 268.0 280.6
Temporary agency contractors 15.6 16.7
Pension scheme administration expenses 0.4 0.6
Utility costs 70.3 68.8
Consumables and gases 53.6 52.6
Transport and carriage costs 11.5 12.4
Inventories expensed 69.8 70.5
Repairs and maintenance 24.5 25.5
Depreciation of property, plant and equipment 56.5 59.7
Depreciation of right-of-use assets 13.1 13.6
Amortisation of other intangible assets 10.9 12.4
Impairment loss on trade receivables 1.4 2.4
Impairment of property, plant and equipment - 0.1
Gain on disposal of property, plant and equipment (0.4) (5.5)
Gain on disposal of right-of-use assets - (0.2)
Government assistance support received1 (1.4) (1.0)
Acquisition costs 0.1 2.4
Net foreign exchange loss/(gain) 0.5 (0.4)
Within exceptional items:
Site closure and associated costs (see note 3) 11.8 5.2
Impairment of property, plant and equipment (see note 3) 3.1 16.9
Impairment of other intangible assets (see note 3) 0.3 29.2
Impairment of right-of-use assets (see note 3) 0.3 1.1
Impairment of goodwill (see notes 3 & 6) - 18.0
(Gain)/loss on disposal of property, plant and equipment (see note (1.8) 0.1
3)
1 Government assistance consists of support towards R&D of £1.1m (2024: £0.4m); local economic support of £0.3m (2024: £0.4m); energy support programmes £nil (2024: £0.1m); and £nil (2024: £0.1m) in respect of other support programmes.
3. Exceptional items
2025 2024
£m £m
Impairment of ERP intangible asset: - 28.4
Impairment of goodwill - 18.0
Optimisation programme: 20.9 31.9
Impairment of assets 3.7 18.8
Severance and redundancy cost 5.6 4.1
Site closure and associated costs 11.8 5.2
(Gains)/losses on sale of property, plant and equipment (1.8) 0.1
Loss on sale of business 0.9 2.7
Other programme costs 0.7 1.0
Total exceptional items 20.9 78.3
Optimise programme
In 2024 the Group announced the Optimise programme to drive improvements across the business, primarily centred on restructuring and/or closing sites that were utilising older, less efficient and more carbon-intensive technologies. This program was extended in
During 2025, the Group has continued to progress the site closures and asset sales forming part of Optimise, recognising an exceptional charge of £20.9m (2024: £31.9m), net of gains on the sale of the associated assets.
Impairments of £3.7m (2024: £18.8m) have been charged to exceptional items relating to sites, operational lines, equipment and intangible assets that will no longer generate benefits. These impairments comprise of £3.1m (2024: £16.9m) for property, plant and equipment, £0.3m (2024: £1.1m) for right-of-use assets and £0.3m impairment of software and acquired intangibles (2024: £0.8m). Gains of £1.8m (2024: losses of £0.1m) were realised on the sale of property, plant and equipment assets that were no longer required as a result of Optimise.
Site closure costs of £11.8m (2024: £5.2m) were incurred in respect of closures announced before
In
See also the strategic review of the 2025 Annual Report for further details of the Optimisation programme.
4. Taxation charge
2025 2024
£m £m
Current taxation - charge for the year 17.5 20.7
Current taxation - adjustments in respect of previous years - 1.5
Deferred tax - charge for the year 0.4 (13.2)
Deferred tax - adjustments in respect of previous years 1.2 (1.3)
Total taxation charge 19.1 7.7
The Group operates in several jurisdictions, some of which have tax rates in excess of the
The charge for the year can be reconciled to the profit before taxation per the consolidated income statement as follows:
2025 2024
£m £m
Profit before taxation 74.5 28.4
Tax at the weighted average country tax rate of 25.1 % (2024: 25.1%) 18.7 7.2
Tax effect of expenses in various jurisdictions not deductible in 2.0 1.6
determining taxable profit
Impact of recognition or derecognition of deferred tax balances (0.6) 0.8
Tax effect of other adjustments in respect of previous years:
Current tax1 - 1.5
Deferred tax1 1.2 (1.3)
Effect of financing activities between jurisdictions2 (1.9) (2.5)
Impact of trade and minimum corporate taxes 0.2 0.2
Effect of changes in statutory tax rates on deferred tax assets and (0.8) (0.2)
liabilities
Other tax risk provision movements3 0.3 0.4
Tax expense for the year 19.1 7.7
1
2025 and 2024 adjustments in current and deferred tax in respect of previous years relate mainly to changes in assumptions and outcomes in
2 The Group is externally financed by a mix of cash flows from operations and short-term borrowings. Internally, operating subsidiaries are predominantly financed by intercompany loans. The effect of these arrangements is stated net of provisions, including a credit relating to a provision release of £1.9m (2024: £2.5m) based on management’s estimation of the tax risk relating to the potential disallowance of interest.
3 Includes provisions for local tax risks and cross-border transactions. 2025 includes a credit of £0.3m (2024: £2.2m) for the release of provisions for tax risks which are no longer within an audit period.
Tax on retirement benefit obligations taken directly to equity was £nil (2024:charge of £0.1m).
The Group recognises a number of tax provisions in respect of ongoing tax enquiries and in recognition of the multinational tax environment in which Bodycote operates where the nature of the tax positions that are taken is often complex and subject to change. Included within current tax liabilities of £34.3m (2024: £32.2m) are tax provisions totalling £23.8m (2024: £24.9m), of which £2.0m become ineligible for tax audit during 2026 (2024: £4.2m become ineligible in 2025). The provisions are based on an assessment of a range of possible outcomes to determine reasonable estimates of the consequences of tax authority audits in the various tax jurisdictions in which the Group operates. The material provisions relate to the financing of the Group’s operations where management’s judgement is exercised to determine the quantum of the tax risk provisions based on an understanding of the appropriate local tax legislation, taking into consideration the differences of interpretation that can arise on a wide variety of issues including the nature of ongoing tax audits and the experience from earlier enquiries, and determining whether any possible liability is probable. The Group’s individual provisions by country vary in quantum from £1.9m to £8.8m (2024: £1.9m to £8.8m).
5. Earnings per share
2025 2024
£m £m
Earnings
Earnings for the purpose of basic earnings per share being net profit 54.9 20.0
attributable to equity holders of the parent
Number Number
Number of shares
Weighted average number of ordinary shares for the 176,816,708 186,012,493
purpose of basic earnings per share
Effect of dilutive potential ordinary shares:
Shares subject to performance conditions 53,826 418,728
Shares subject to vesting conditions 355,857 448,614
Weighted average number of ordinary shares for the 177,226,391 186,879,835
purpose of diluted earnings per share
Pence Pence
Earnings per share:
Basic 31.0 10.8
Diluted 31.0 10.7
2025 2024
£m £m
Adjusted earnings
Net profit attributable to equity holders of the parent 54.9 20.0
Add back:
Amortisation of acquired intangible assets 9.7 10.4
Acquisition costs 0.1 2.4
Exceptional items 20.9 78.3
Tax on adjusted earnings (7.1) (20.7)
Adjusted earnings 78.5 90.4
Pence Pence
Adjusted earnings per share:
Basic 44.4 48.6
Diluted 44.3 48.4
As at
6.
2025 2024
£m £m
Cost
At 1 January 285.9 282.3
Exchange differences (5.9) (0.2)
Transfer to assets held for sale (2.0) -
Recognised on acquisition of businesses - 3.8
Total cost 278.0 285.9
Accumulated impairment
At 1 January 78.9 60.8
Impairment - 18.0
Exchange differences (1.4) 0.1
Total accumulated impairment 77.5 78.9
Carrying amount 200.5 207.0
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. In previous years they have also formed the lowest level to which the Group has allocated goodwill and the level at which goodwill has been monitored 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 updated as a result of those changes. Accordingly, in the year ended
• HIP
• S 3 P
• Surface Technology (‘ST’)
•
•
• Emerging markets
A summary showing how the CGUs at
Goodwill
2024
Group of CGUs CGUs £m
North America HIP 3.9
HIP Europe HIP 2.2
Total HIP 6.1
Europe ST 12.6
ST North America ST 28.5
Total ST 41.1
S3P Total S3P nil
Total Specialist Technologies 47.2
Europe AGI1 24.9
AGI North America AGI 39.4
Total AGI 64.3
UK ADE 11.0
North America ADE 69.7
ADE
France and Belgium ADE 1.2
Total ADE 81.9
Eastern Europe AGI 11.6
Emerging markets Asia AGI nil
Total Emerging markets 11.6
Total Precision Heat treatment 157.8
Non-core1 2.0
Total Goodwill 207.0
1 £2m of goodwill that was reported within the Europe AGI CGU at
The Group has therefore aggregated the goodwill previously held by CGUs to determine the goodwill held by those six groups of CGUs, and they formed the basis of its impairment test at
In assessing value in use, estimated pre-tax future cash flows for each group of CGUs are discounted to their present value using a pre-tax discount rate which reflects current market assessments of the time value of money and the risks specific to the group of CGUs, including country risk premia.
Fair value less costs to dispose is determined in a similar manner but takes into account the benefits of actions that a rational buyer would take during the forecast period. Those actions include any that form part of the Group’s strategic optimisation programme that the business had not announced to the affected plants as at
In 2025, the recoverable amounts of all of the groups of CGUs were determined using value in use with the exception of AGI and ST, for which the recoverable amount has been determined using fair value less costs to dispose. The fair value less costs to dispose of AGI and ST are in excess of their value in use since a number of the benefits referred to above had not been formally committed to prior the year end (for example, via a public announcement) and therefore could not be reflected in their value in use.
The cash flows of each group of CGUs are based on the 2026 budget and the five-year financial plan up to and including 2030, both of which have been approved by the Board. A long-term growth rate has been applied into perpetuity from 2030 onwards.
The key assumptions applied in determining the recoverable amount of each group of CGUs were as follows:
Revenue: Revenue for 2026–2030 was projected based on management’s growth expectations, which take account of the expected trends in the underlying market sectors served by each group of CGUs. These were benchmarked against external projections for each market. Pricing expectations were based on recent experience in the market and forecast inflation expectations.
Operational margin growth: Operational margin growth represents the changes expected to the group of CGUs’ operating profit as a percentage of revenue. The margin levels assumed reflect management’s expectations of future business performance and are informed by past performance adjusted for changes made to the plant footprint.
Capital expenditure: The future cash flows include estimates of capital expenditure required to maintain the existing asset base of each group of CGUs and are based on historical experience. In determining the estimates of capital expenditure, management has assumed that capital expenditure will at least equal depreciation in the long term. In the case of AGI and ST, which were measured on a fair value less costs to dispose basis, planned expansionary capex projects were also included.
Long-term growth rate: Long-term growth rates have been applied into perpetuity based on the long-term average GDP growth projections of the geographies relevant to each group of CGUs. Growth rates are in the range of 1.5% to 2.4% (2024: 2.0% to 2.2%).
Discount rate: The discount rates have been derived from a weighted average cost of capital, adjusted for the geographies in which each group of CGUs operates. The post-tax discount rates range from 9.0% to 9.3% (2024: 9.4% to 10.1%). The pre-tax discount rates are the rates which, when applied to the pre-tax cash flows, result in the same NPV as calculated by the post-tax discount rate applied to the post-tax cash flows. The pre-tax discount rates range from 11.7% to 11.9% (2024: 11.6% to 12.7%).
2025 20241
£m £m
Specialist Technologies 45.3 47.2
Precision Heat Treatment 155.2 157.8
Non-core - 2.0
200.5 207.0
1
Restated to reflect the changes to the Group’s operating segments following the expansion to the Optimise Programme announced in
With the exception of goodwill related to the French sites disposed in 2025, no goodwill was allocated to the Group’s non-core segment on the basis that the value of that segment was minimal compared to the Group’s core segments.
A summary of the goodwill allocated to each of the groups of CGUs containing goodwill, along with the long-term growth rates and discount rates used to determine their recoverable amount, is set out below:
Goodwill Long-term growth Post-tax Pre-tax discount
carrying value rate discount rate rate
2025 2025 2025 2025
£m % % %
Specialist
technologies:
HIP 5.9 1.6 9.2 11.7
ST 39.4 1.6 9.3 11.9
S3P nil n/a n/a n/a
Precision Heat
Treatment:
AGI 63.6 1.5 8.8 11.6
ADE 79.2 1.6 9.2 11.7
Emerging markets 12.4 2.4 9.3 11.7
The recoverable amount was higher than the book value for all groups of CGUs and, accordingly, the Directors have concluded that no impairment charge is required 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, operational costs, and future capital expenditure.
The Group has conducted sensitivity analysis by considering reasonably possible changes to the key assumptions applied in the recoverable amount calculations for each group of CGUs. The sensitivity analysis considered downside scenarios including an increase in discount rates, a reduction in sales growth throughout the forecast period and reduced operating margin growth. With the exception of AGI and ST, no reasonably possible downside reductions to any of the assumptions resulted in an impairment for any of the groups of CGUs.
The sensitivities modelled are intended to reflect an unlikely but reasonably possible downturn in key assumptions that persists in the long-term. None of the downside scenarios incorporate mitigating actions reflect mitigating actions that management would take in the event that such a situation developed.
In determining the sensitivities to apply, consideration was given to the impact that climate change risks and opportunities may have on the Group’s businesses. Specific scenarios relating to the potential risks of climate change, as set out in the TCFD section of the Annual Report, were considered to determine if these should be included in the modelling performed and it was determined that none of these scenarios would have a material impact on the outcome. Furthermore, the impact of the sensitivities was deemed sufficiently severe to cover a range of potential risks, some of which could relate to these potential climate change risks.
The recoverable amount of AGI and ST were determined using a fair value less costs to dispose. For AGI, this reflected operating margins which, in 2030, were modestly (30bps) below the level achieved in 2023 prior to the recent downturn in industrial and automotive markets, alongside benefits from Optimise and other initiatives giving rise to an annual cash benefit of £5.6m by 2030. If none of these benefits were achieved, the group of CGUs would retain a more modest level of headroom. In addition, in the unlikely event that no benefits were achieved and margins were limited to 150bps below the 2023 level, the headroom of £82m would be fully eroded. A further 50bps reduction in margin would result in an impairment of c.£12.0m.
For ST, this reflected operating margins which improve by 330bps versus the 2024 level, prior to the recent downturn in Oil & Gas markets, alongside benefits from Optimise and other initiatives giving rise to an annual cash benefit of £4.9m. If none of these benefits were achieved and margins were limited to 90bps below the 2024 level, headroom of £56.5m would be fully eroded. A further 50bps reduction in the margin would result in a c.£4.5m impairment.
7. Provisions
2025
Restructuring Environmental Legal Total
£m £m £m £m
At 1 January 2025 8.4 3.9 2.1 14.4
Additions 13.6 0.9 1.8 16.3
Released (1.9) (0.3) (0.4) (2.6)
Utilisation (10.9) (1.1) (0.6) (12.6)
Exchange difference (0.1) (0.2) 0.1 (0.2)
At 31 December 2025 9.1 3.2 3.0 15.3
Included in current liabilities 13.1
Included in non-current liabilities 2.2
15.3
In
Restructuring
Included in restructuring provision additions in the year are £13.6m (2024: £8.5m) which have been charged to exceptional items in the consolidated income statement in respect of the Optimisation programme. These charges related to the redundancy and severance of employees who have been notified before the year end, along with site closure costs where the announcement has been made. The majority of cash outflows in respect of these provisions are expected to occur within 12 months of the balance sheet date. See note 3 for further details.
Environmental Provisions
The Group provides for the 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. This provision is reviewed annually to determine the best estimate of expenditure required to settle the identified obligations. Where applicable, external confirmations of the future liabilities are obtained.
The Group could be subjected to regulatory or legislative requirements to remediate sites in the future. However, it is not possible at this time to determine whether, and to what extent, any liabilities exist, other than for those recognised above. Therefore no provision is recognised in relation to these items.
Legal provisions
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, a provision is recognised if the exposure can be reliably measured and an outflow of economic benefits is considered probable. The amount provided is based on legal advice
.
There were no individually material provisions as at
8. Share capital
Ordinary Shares Share
Capital1
2025 2024 2025 2024
Number Number £m £m
At 1 January 182,897,496 191,456,172 31.6 33.1
Share buyback programme (9,401,421) (8,558,676) (1.6) (1.5)
At 31 December 173,496,075 182,897,496 30.0 31.6
1 Nominal value of shares held is 173/11 p each.
In 2024 a share buyback programme was announced that was then extended in
The nominal value of the shares purchased in 2025 is £1.6m (2024: £1.5m) which has been transferred to the capital redemption reserve with the difference between the nominal value and the purchase price recorded within retained earnings.
2025 2024
Shares purchased with a nominal value of 173/11p 9,401,421 8,558,676
Consideration excluding costs £57.3m £57.3m
Costs £0.3m £0.4m
Total consideration £57.6m £57.7m
9. Dividends
2025 2024 2025 2024
Per share Per share £m £m
Interim dividend for the year ended 31 December 6.9 6.9 12.0 12.7
Proposed final/final dividend for the year ended 16.1 16.1 27.8 28.7
31 December
Total dividend 23.0 23.0 39.8 41.4
The 2024 final dividend of 16.1p per share was paid on
10. Notes to the cash flow statement
2025 2024
£m £m
Profit for the year 55.4 20.7
Adjustments for:
Finance income (0.4) (0.8)
Finance charges 9.5 10.3
Taxation charge 19.1 7.7
Operating profit 83.6 37.9
Non-cash items reflected in operating profit before exceptional
items:
Depreciation of property, plant and equipment 56.5 59.7
Depreciation of right-of-use assets 13.1 13.6
Amortisation of other intangible assets 10.9 12.4
Profit on disposal of property, plant and equipment (0.4) (5.5)
Profit on disposal of right-of-use assets - (0.2)
Impairment of property, plant and equipment and other assets - 0.1
Non-cash items reflected in exceptional items:
(Profit)/loss on disposal of property, plant and equipment (1.8) 0.1
Disposal of business 0.9 2.6
Impairment of goodwill - 18.0
Impairment of acquired intangibles - 0.8
Impairment of fixed assets 3.7 46.4
EBITDA 166.5 185.9
Share-based payments 3.4 0.6
(Increase)/decrease in inventories (1.7) 1.3
(Increase)/decrease in receivables (3.9) 7.2
Increase/(decrease) in payables 0.3 (7.6)
Increase/(decrease) in provisions 0.9 (0.6)
Cash generated by operations 165.5 186.8
Net income taxes paid (18.6) (32.1)
Net exchange differences (3.4) (2.1)
Net cash from operating activities 143.5 152.6
2025 2024
£m £m
Cash and cash equivalents comprise:
Cash and bank balances 25.2 19.1
Bank overdrafts (included in borrowings) (0.8) (3.1)
24.4 16.0
Cash and bank balances include £0.7m (2024: £1.1m) held in the
11. Post balance sheet events
Acquisition of
On
The Group’s assessment of the fair value of the assets and liabilities acquired is ongoing but the net assets acquired are expected to relate primarily to PPE and customer intangibles with the remainder allocated to goodwill.
Share repurchase programme
On
that buyback.
Alternative performance measures (APMs) (unaudited)
The Group’s Financial Statements are prepared using the basis of preparation and accounting policies described in the 2025 Annual Report. To provide additional information and analysis and to enable a full understanding of the Group’s results, management also makes use of a number of 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 acquisitions 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 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 to
its composition. The Group sold 10 sites in
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 10 to the 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 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, cash flows arising on the acquisitions or disposal of businesses, movements in net debt due to lease liability additions and disposals and non-cash share based payment charges which are deducted as a proxy for the cost of providing the associated benefits to employees. It is presented to give an indication of the businesses’ 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.
Return on capital employed is defined as adjusted operating profit divided by capital employed, which is defined as the average of opening and closing net assets adjusted for net (debt)/cash. Return on capital employed provides a measure of how well the business has deployed capital to generate profit.
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.
2024 Segmental APMs have been restated to reflect the changes to the Group’s segments as a result of the expansion of the Optimisation programme announced in
Adjusted operating profit
Adjusted operating profit is reconciled to Operating Profit in note 1 to the financial statements.
Adjusted operating margin
2025
Specialist Precision Central cost
Technologies Heat and Total core Non-core Consolidated
Treatment eliminations
£m £m £m £m £m £m
Revenue 212.3 459.3 - 671.6 55.5 727.1
Adjusted
Operating 57.6 73.7 (18.3) 113.0 1.3 114.3
Profit
Adjusted
operating 27.1% 16.0% n/a 16.8% 2.3% 15.7%
margin (%)
2024 Restated
Precision Central cost
Specialist Heat Total core Non-core Consolidated
Technologies Treatment and
eliminations
£m £m £m £m £m £m
Revenue 222.3 459.8 - 682.1 75.0 757.1
Adjusted
Operating 65.5 80.4 (20.4) 125.5 3.5 129.0
Profit
Adjusted
operating 29.5% 17.5% n/a 18.4% 4.7% 17.0%
margin (%)
Adjusted profit before taxation
2025 2024
£m £m
Profit before taxation 74.5 28.4
Add back:
Amortisation of acquired intangibles 9.7 10.4
Acquisition costs 0.1 2.4
Exceptional items 20.9 78.3
Adjusted profit before taxation 105.2 119.5
Organic revenue and adjusted operating profit at constant currency.
Reconciled to revenue and adjusted operating profit in the table below:
2025
Specialist Precision Central cost
Technologies Heat and Total core Non-core Consolidated
Treatment eliminations
£m £m £m £m £m £m
Revenue 212.3 459.3 - 671.6 55.5 727.1
Constant
exchange 1.8 6.5 - 8.3 0.2 8.5
rates
adjustment
Revenue at
constant 214.1 465.8 - 679.9 55.7 735.6
currency
Less
adjustments
for revenue
from
disposals - - - - (22.3) (22.3)
completed
in the
current or
prior year
Organic 214.1 465.8 - 679.9 33.4 713.3
revenue
Adjusted
operating 57.6 73.7 (18.3) 113.0 1.3 114.3
profit
Constant
exchange 0.5 1.3 - 1.8 - 1.8
rates
adjustment
Adjusted
operating
profit at 58.1 75.0 (18.3) 114.8 1.3 116.1
constant
currency
Less
adjustments
for
operating
profit from - - - - (2.1) (2.1)
disposals
completed
in the
current or
prior year
Organic
adjusted 58.1 75.0 (18.3) 114.8 (0.8) 114.0
operating
profit
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 222.3 459.8 - 682.1 75.0 757.1
currency
Less
adjustments
from
disposals - - - - (28.6) (28.6)
completed
in the
prior year
Organic 222.3 459.8 - 682.1 46.4 728.5
revenue
Adjusted
operating
profit at 65.5 80.4 (20.4) 125.5 3.5 129.0
constant
currency
Less
adjustments
from
disposals - - - - (3.4) (3.4)
completed
in the
prior year
Organic
adjusted 65.5 80.4 (20.4) 125.5 0.1 125.6
operating
profit
Adjusted EBITDA (earnings before interest, taxation, depreciation and amortisation)
2025 2024
£m £m
EBITDA 166.5 185.9
Acquisition costs 0.1 2.4
Exceptional items, excluding (gains)/losses on sale of property,
plant and equipment, impairments, and losses on disposal of 18.1 10.4
business
Adjusted EBITDA 184.7 198.7
Adjusted EBITDA Margin 25.4% 26.2%
Adjusted operating cash flow
2025 2024
£m £m
Adjusted EBITDA 184.7 198.7
Less:
Net capital expenditure (77.0) (60.5)
Principal elements of lease payments (13.8) (13.5)
Provisions movement 0.4 (7.3)
Working capital movement (5.7) (1.9)
Adjusted operating cash flow 88.6 115.5
Free cash flow
2025 2024
£m £m
Adjusted operating cash flow 88.6 115.5
Less:
Restructuring cash flows (14.3) (3.9)
Net income taxes paid (18.6) (32.1)
Net interest paid (8.2) (8.9)
Free cash flow 47.5 70.6
Adjusted operating cash conversion
2025 2024
£m £m
Adjusted operating cash flow 88.6 115.5
Adjusted operating profit 114.3 129.0
Adjusted operating cash conversion 77.5% 89.5%
Free cash flow conversion
2025 2024
£m £m
Free cash flow 47.5 70.6
Adjusted operating profit 114.3 129.0
Free cash flow conversion 41.6% 54.7%
Adjusted tax charge
2025 2024
£m £m
Tax charge 19.1 7.7
Tax on amortisation of acquired intangibles 3.6 2.1
Tax on acquisition costs - 0.6
Tax on exceptional items 3.6 18.0
Adjusted tax charge 26.2 28.4
Adjusted tax rate
2025 2024
£m £m
Adjusted tax charge 26.2 28.4
Adjusted profit before taxation 105.2 119.5
Adjusted tax rate 24.9% 23.8%
Adjusted earnings and adjusted earnings per share
A detailed reconciliation is provided in note 5 of the consolidated financial statements.
Net debt excluding lease liabilities
2025 2024
£m £m
Cash and bank balances 25.2 19.1
Bank overdrafts (included in borrowings) (0.8) (3.1)
Bank loans (included in borrowings) (129.2) (84.3)
Net debt excluding lease liabilities (104.8) (68.3)
Lease liabilities (60.8) (63.5)
Net debt (165.6) (131.8)
A reconciliation of movements in net debt excluding lease liabilities to Free Cash Flow is included in the CFO report in the 2025 Annual report.
Return on capital employed (%)
2025
Specialist Precision Central cost
Technologies Heat and Total core Non-core Consolidated
Treatment eliminations
£m £m £m £m £m £m
Adjusted
operating 57.6 73.7 (18.3) 113.0 1.3 114.3
profit
Average
capital 313.6 531.7 (62.9) 782.4 22.2 804.6
employed
Return on
capital 18.4% 13.9% n/a 14.4% 5.8% 14.2%
employed
(%)
2024 Restated
Precision Central cost
Specialist Heat Total core Non-core Consolidated
Technologies Treatment and
eliminations
£m £m £m £m £m £m
Adjusted
operating 65.5 80.4 (20.4) 125.5 3.5 129.0
profit
Average
capital 308.0 530.4 (57.0) 781.4 41.5 822.9
employed
Return on
capital 21.3% 15.2% n/a 16.1% 8.4% 15.7%
employed
(%)
