28th May 2020 09:38
(Alliance News) - Bodycote PLC on Thursday reported a dive in revenue for the first four months of 2020 as it announced a restructuring programme that will cut 13% of its staff.
The coatings services firm said that revenue to the end of April was 12% lower year-on-year at GBP216 million, down 11% at constant currency and 13% excluding the impact of acquisitions. For April, constant currency revenue was 30% lower than the same month in 2019, or 35% lower excluding the impact of acquisitions.
Bodycote said it has commenced a restructuring programme which will cut 700 staff - around 13% of headcount. It said that alongside savings in infrastructure from closed plants, it expects to permanently slash around GBP45 million of annualised costs.
Savings will be realised through 2020, with most being completed by year-end and the full annualised savings in place from the second quarter of 2021, the company explained. The restructuring programme is expected to cost GBP25 million, up significantly from GBP15 million advised in March.
"The restructuring activity is designed to right-size our business, so that we will emerge from the current downturn in a strong position, with good, sustainable profitability and cash flow generation, as well as healthy margins and returns," the company said.
A further temporary reduction in staff and a restriction on expenditure is expected to result in savings of around GBP7 million per month.
As at the end of April, Bodycote had net debt of GBP44 million. It currently has cash of over GBP40 million and GBP170 million headroom in its revolving credit facility.
The stock was trading 4.2% higher at 615.00 pence each on Thursday morning in London.
By Ife Taiwo; [email protected]
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