23rd May 2007 15:05
Bodycote International PLC23 May 2007 23 MAY 2007 BODYCOTE ANNUAL GENERAL MEETING STATEMENT Speaking at the AGM today, James Wallace, Chairman, reviewed the Group'sperformance during 2006 and the first four months of 2007 and made the followingcomments: The solid performance of the Group reported in the first quarter tradingstatement issued on 23rd April 2007 has continued. Sales growth for the firstfour months of the year was 16.0%, although at constant exchange rates theincrease was 22.2%, of which 7.3% is organic and 14.9% was from acquisitions.We are pleased with the rate of organic growth in each of the business unitswith Testing and Hot Isostatic Pressing (HIP) running at over 10% and HeatTreatment at 5.9%. Aerospace, Power Generation and Oil & Gas demand remainsrobust in all territories and automotive sales have maintained their strongerperformance in Continental Europe, although North America automotive continuesto be soft. The impact of currency movements, particularly the weakness of theUS dollar, has reduced sales in sterling terms in the first four months of theyear by 6.2%. If exchange rates remain at their current level, the year on yeareffect will moderate as the year progresses, with the annual impact on sales andprofits expected to be c. 3%. Group margins are one percentage point ahead of the same period last year,driven by gains in Heat Treatment, as we see the benefits of sales growth andrecent facility restructuring in the US and UK. Margins in Testing and HIP havebeen maintained. Energy costs continue to be well managed and recovered. Theimprovement in profitability has been translated into continuous improvement ofROCE, with the largest increase coming in Heat Treatment. Testing and HIPcontinue to meet the Group's ROCE expectations. As previously stated the Group plans to spend approximately £60m on acquisitionsin 2007. To date the Group has acquired Techmeta S.A, an electron beam welderin France with sales of approximately £6m, the PVD activities of IonBond inBrazil and Argentina and the heat treatment business of IonBond in India withcombined annualised sales of £2m. Agreement has also been reached to acquireNingbo Jiangdong Ruidahong Heat Treatment Co. Ltd, which operates from twofacilities in the Yangtze River Delta and has sales of c. £2m per annum. Inaddition we have registered a new Testing business in Bahrain, which will becomeoperational during the second half of 2007. As shareholders will be aware, Bodycote was the subject of takeover speculationand a series of approaches from Sulzer AG of Switzerland. The last indicativeproposal that we received was clearly stated to be final and was predicated,amongst other conditions, on the Directors recommending any potential offer toshareholders. The Board with its advisers considered the longer term prospectsfor the business and, having taken into account the views expressed by all majorshareholders, determined that this proposal significantly undervalued thebusiness and consequently the Board could not make a recommendation toshareholders. The Board is committed to the success of the business andmaximising shareholder value. A presentation on our growth strategy will be given by the CEO John Hubbard atthe end of the meeting and copies of his slides will be on the company websitewww.Bodycote.com . This strategy is supported by a five year forward lookingbusiness plan, which is reviewed annually. We look forward to the remainder of the year with confidence and firmly believethat we can achieve superior investment returns for our shareholders over themedium term. We thank shareholders for their support in recent weeks and ourdedicated staff for their continued contribution to Bodycote's success. The Interim Results will be announced on Tuesday 31 July 2007. For further information, please contact Bodycote International PLC Tel +44 (0) 1625 505300John D. Hubbard, Chief ExecutiveDavid Landless, Finance Director Financial Dynamics Tel: +44 (0) 207 831 3113Jon SimmonsJames Ottignon This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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