6th Apr 2020 10:40
(Alliance News) - Bodycote PLC on Monday said it is keeping its final dividend proposal under review amid Covid-19 uncertainties as it also said it has completed the USD200 million acquisition of Ellison Surface Technologies.
Back in March, the coatings services firm said it would pay a final dividend of 14.0 pence per share, up from 13.3p declared the prior year. However, it said that uncertainty caused by the outbreak has resulted in it keeping the proposal for that final dividend under review.
Bodycote had already paid an interim dividend of 6.0p, up from 5.7p a year before.
Bodycote said that while trading in its first quarter has not been hurt, it expects conditions to get worse and is therefore implementing cash conservation measures. It added that it currently has GBP147 million of available liquidity and is therefore in a strong financial position to to withstand "a signifiant decline in trading conditions."
"Bodycote's financial position is strong and our agile and devolved approach to managing the business from day to day puts us in a good position to weather the unprecedented disruption which we are likely to face," said Chief Executive Stephen Harris.
The FTSE 250-listed company also said it has completed the USD200 million acquisition of North America-based Ellison Surface Technologies, announced in December. The company said USD120 million was paid on Friday, with the remainder USD80 million expected to be paid April 3, 2021.
Ellison's business generated revenue of USD59 million in 2019, Bodycote said, with associated pro-forma earnings before interest, taxes, depreciation, and amortization of USD12 million. Based on results year to date, Bodycote said it expects to receive tax benefits worth at least USD30 million in the coming years.
For 2018, Ellison posted revenue of USD50 million and associated pro-forma Ebitda of USD8 million.
Commenting on the acquisition, Harris said: " This acquisition continues our strategy to build our Specialist Technolgies portfolio and enhance our exposure to the civil aerospace market, where we see structural growth over the long term, notwithstanding the current hiatus in the industry. Ellison's business is one that we have respected for a long time and is a perfect strategic fit for Bodycote's Specialist Technologies businesses."
Bodycote shares were trading 8.5% higher at 528.50p each on Monday morning in London.
By Ife Taiwo; [email protected]
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