Bodycote declares dividend as it cuts more than 1,000 staff

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Bodycote PLC (LON:BOY) has declared an interim dividend and announced a further restructuring that may lead to more job losses at its aerospace and defence arm.

Having cut its automotive & general industrial (AGI) headcount by around a thousand so far this year, the FTSE 250-listed engineer said there will be a “similar restructuring programme” at the aerospace, defence & energy (ADE) division as it plans to consolidate its footprint into fewer, larger facilities.

The company, which spent £25.1mln on an interim dividend for the past year in September and around £4mln on its restructuring programme, has approved the payment of an interim dividend for 2020 of 6p per share (costing £11.4mln).

The company, which provides heat treatment, metal joining, surface technology and pressing services, said group profitability has “held up relatively well” despite revenue falling 20% to £193.6mln in the third quarter to end-October, with sales from ADE down 33% as the civil aerospace division continues to wilt as a result of coronavirus travel restrictions, while AGI was down 15%.

Revenue for the 10 months to 31 October 2020 of £500.3mln is down 18% on last year.

Underlying cash flows in the period was said to have remained strong.

On the outlook, management said AGI has recovered strongly from the steep revenue declines in the second quarter and is felt to be “well placed to benefit from the step change improvement in the quality of this business”, while ADE is under pressure and the restructuring was said to be “necessary actions to improve the business in the short term, while protecting our ability to take advantage of the upturn when it comes”.

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