Final Results
Summary by AI BETAClose X
Bodycote plc – 2025 Full Year Results
Good strategic progress in mixed markets
|
Group summary |
Adjusted 1 |
Statutory |
||||
|
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 share 2 |
44.4p |
48.6p |
-8.6% |
31.0p |
10.8p |
+187% |
|
Full year ordinary dividend per share |
|
|
|
23.0p |
23.0p |
- |
|
Core summary 1 |
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 July 2025
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 in France in 2025 and an Aerospace & Defence (A&D) acquisition in January 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, Jim Fairbairn, Chief Executive Officer, said:
“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 North America. All of these actions are improving the quality of our portfolio and creating a more resilient and faster growing Bodycote.
“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 9.30 am GMT on 11 March 2026 . The presentation will also be webcast live. Please find connection instructions below:
Webcast: https://www.bodycote.com/webcast2025
Conference call details:
United Kingdom local: +44 20 3936 2999
United Kingdom (Toll-free): +44 808 189 0158
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 Jim Fairbairn, Group Chief Executive Ben Fidler, Chief Financial Officer Peter Lapthorn, Investor Relations & FP&A Tel: +44 1625 505 300 |
FTI Consulting Richard Mountain Edward Knight Tel: +44 203 727 1340 |
About Bodycote plc
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, Power Generation, Oil & Gas, Construction, Medical and Transportation. Customers have entrusted their products to Bodycote's care for more than 50 years. For more information, visit www.bodycote.com .
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 UK. Excluding the Oil & Gas headwind, organic growth in Specialist Technologies was c.2%.
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 Specialist Technologies Oil & Gas activity, as well as challenging market conditions in Automotive and Industrial. These headwinds were partly offset by ~£4m benefits from the Optimise programme, which increased through the year in line with our expectations and supported the improved margins in the second half.
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
|
Specialist Technologies |
FY 2025 |
FY 2024 (restated) |
Organic Change |
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 |
|
|
|
|
|
|
|
Precision Heat Treatment |
FY 2025 |
FY 2024 (restated) |
Organic Change |
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 |
|
|
|
|
|
|
|
Non-Core |
FY 2025 |
FY 2024 (restated) |
Organic Change |
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 Middle East, which resulted in delays to the ramp-up of new project wins. Excluding this decline in Oil & Gas, organic revenue rose c.2% in the year. This reflected strong growth in A&D and IGT, partly offset by softer demand in Automotive and Industrial Markets. Adjusted operating profit was £57.6m (FY24: £65.5m), with operating margins reducing to 27.1% (FY24: 29.5%), largely as a result of the drop in high-margin Oil & Gas activity. Performance in Specialist Technologies improved considerably in the second half, with organic growth of +0.7% (H1: -7.7%) and operating margins of 28.2% (H1: 26.0%), reflecting the acceleration in underlying growth in A&D and IGT.
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 Europe and North America, albeit prior year comparators eased in the second half. As a result of low volumes and the challenging market backdrop, operating margins were 150bps lower at 16.0% (FY24: 17.5%). Benefits from the Optimise programme increased through the year, including the gradual transfer of the retained portion of revenue from Non-Core sites, as well as overhead reductions. These actions leave the division well positioned to benefit when Industrial and Automotive market conditions improve.
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 November 2025 we completed the sale of ten Non-Core, Automotive and Industrial focused sites in France for net proceeds of £19m. Following the disposal, our remaining footprint in France is focused predominantly on A&D and higher-grade Industrial Markets. We have now closed or consolidated eight of the other 20 Non-Core sites, with cash costs to achieve this running in line with expectations. By the end of 2026, around 85% of site closures are expected to be complete, resulting in minimal run-rate Non-Core revenues. Overhead cost reductions have also progressed well and are expected to be complete in the first half of 2026. We delivered a £4m profit benefit in 2025, with a similar c.£4m incremental benefit expected in 2026. We remain confident of reaching our target of at least £15m run-rate benefits by mid-2027.
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 Cincinnati, Ohio, poor throughput was limiting the capacity available for growth. Through the pilot, the factory layout was re-organised and a more efficient process flow was designed, which achieved a ~5 mile reduction in the distance that parts travelled each week and saved more than 500ft 2 of production floorspace. Following the success of the pilot programme, the full roll-out of operational excellence tools across all Core sites was launched. This comprises two phases: first, ‘foundational’ tools including 5S (a workplace organisation methodology) and daily management; secondly, more advanced tools and the embedding of a continuous improvement (‘kaizen’) mindset. The first phase has progressed well with foundational tools being embedded across our portfolio. The second phase is now also underway and will take place across 2026-2028. By 2028, we continue to expect the programme to deliver a benefit of c.100bps to Group operating margins through improved productivity.
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 Germany. Moving into 2026, we continue to invest in a number of key organic expansion projects which will be commissioned in late 2026 or early 2027, including the first S 3 P facility in Asia, increased HIP capacity to serve Aerospace & Defence, and a new Automotive site in Mexico. Revenue from these projects will begin to ramp-up towards the end of 2026, with a modest headwind expected during the year from associated setup costs. Finally, we are continuing to accelerate our organic growth efforts via both sustainability, where we increased our zero-carbon customer offering in 2025, as well as bolt-on M&A for which we have increased our capability and continue to build an attractive pipeline. In January 2026 we completed the acquisition of Spectrum Thermal Processing, an Aerospace-focused Precision Heat Treatment business in Rhode Island, USA.
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 January 2026. In addition we returned close to £100m to shareholders in 2025 via dividends (£40.9m) and share buybacks (£57.6m). We completed the fourth £30m tranche of the Group’s share buyback programme in January 2026, taking the total amount repurchased since the programme began in 2024 to £120m. Today we are announcing a further £80m share buyback which is expected to be completed by the end of 2027. This reflects both the Group’s strong balance sheet and the planned increase in growth investment in the near term to deliver the Group’s strategy.
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 Derby and Rotherham in the UK and we are also now able to offer green premium services in Gothenburg, Sweden. Our customer carbon calculator tool, which demonstrates the emissions savings achievable through using our services, now covers processes representing around 80% of Group revenues and has been independently validated by Bureau Veritas. We are in active conversations with a number of our larger customers around these offerings.
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.”
Ben Fidler
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 November 2025 the Group sold a further ten Non-Core sites in France that primarily served automotive and industrial markets, for a cash consideration of £19.3m.
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 1 January 2024. The changes have not had a material impact on the Group’s tax charge in 2025.
Pension scheme
In December 2025 the Group completed a buy-in for its UK pension scheme. This had no net cash cost, secures the benefits for the scheme’s 680 members and removes the Group’s exposure to future risk around asset performance.
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 |
|
Weighted average number of
|
176,816,708 |
186,012,493 |
|
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 EBITDA 1 |
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 6 November 2025 to shareholders on the register at the close of business on 3 October 2025. Subject to shareholder approval at the 2026 AGM, the final dividend will be paid on 11 June 2025 to shareholders on the register at the close of business on 1 May 2026.
Borrowing facilities
During the year the Group exercised an option to extend the maturity date of its Revolving Credit Facility (‘RCF’) to 19 September 2030. An option to extend by a further one year is executable up to 19 September 2026. The Group is financed by a mix of cash flows from operations, short-term borrowings and leases. The Group’s funding policy aims to ensure continuity of financing at a reasonable cost, based on committed and uncommitted facilities and loans to be procured from several banking partners. The Group continues to have access to committed facilities at competitive rates and deems this to be an effective means of long-term funding. At 31 December 2025, the facility was drawn as follows:
|
|
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 31 December 2025 (2024: £194.5m).
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 11 March 2026 and were signed on their behalf by:
By order of the Board,
Director Director
J. Fairbairn B. Fidler
Audited financial information
The condensed consolidated financial statements and notes 1 to 12 for the year ended 31 December 2025 included
below are derived from the Group’s consolidated financial statements which have been audited by
PricewaterhouseCoopers LLP. The unmodified audit report is available for inspection at the Group’s registered office.
Consolidated income statement
For the year ended 31 December 2025
|
|
|
2025 |
2024 |
|
|
Note |
£m |
£m |
|
Revenue |
1 |
727.1 |
757.1 |
|
Cost of sales and overheads 1 |
2 |
(627.0) |
(647.8) |
|
Other operating income 1 |
2 |
6.5 |
9.7 |
|
Other operating expenses 1 |
2 |
(0.7) |
(0.4) |
|
Net impairment losses on financial assets 1 |
|
(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 31 December 2025
|
|
|
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 reclassified |
|
- |
(0.1) |
|
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 loss |
|
(17.3) |
(9.8) |
|
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 31 December 2025
|
|
|
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 31 December 2025
|
|
|
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 31 December 2025
|
|
Share capital |
Share premium account |
Own shares |
Translation reserves |
Other reserves |
Retained earnings |
Equity attributable to equity holders of the parent |
Non-controlling interests |
Total equity |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
1 January 2024 |
33.1 |
177.1 |
(15.6) |
52.3 |
139.9 |
404.0 |
790.8 |
1.5 |
792.3 |
|
Profit for the year |
- |
- |
- |
- |
- |
20.0 |
20.0 |
0.7 |
20.7 |
|
Exchange differences on translation of overseas operations |
- |
- |
- |
(13.5) |
- |
- |
(13.5) |
(0.3) |
(13.8) |
|
Movements on hedges of net investments |
- |
- |
- |
- |
4.1 |
- |
4.1 |
- |
4.1 |
|
Movements on cash flow hedges |
- |
- |
- |
- |
(0.1) |
- |
(0.1) |
- |
(0.1) |
|
Actuarial losses on defined benefit pension schemes net of deferred tax |
- |
- |
- |
- |
- |
(0.4) |
(0.4) |
- |
(0.4) |
|
Total comprehensive income for the year |
- |
- |
- |
(13.5) |
4.0 |
19.6 |
10.1 |
0.4 |
10.5 |
|
Ordinary shares acquired |
(1.5) |
- |
- |
- |
1.5 |
(90.6) |
(90.6) |
- |
(90.6) |
|
Settlement of share awards |
- |
- |
4.5 |
- |
(4.7) |
0.2 |
- |
- |
- |
|
Share-based payments |
- |
- |
- |
- |
0.6 |
- |
0.6 |
- |
0.6 |
|
Dividends |
- |
- |
- |
- |
- |
(42.8) |
(42.8) |
(0.1) |
(42.9) |
|
31 December 2024 |
31.6 |
177.1 |
(11.1) |
38.8 |
141.3 |
290.4 |
668.1 |
1.8 |
669.9 |
|
Profit for the year |
- |
- |
- |
- |
- |
54.9 |
54.9 |
0.5 |
55.4 |
|
Exchange differences on translation of overseas operations |
- |
- |
- |
(10.0) |
- |
- |
(10.0) |
(0.5) |
(10.5) |
|
Movements on hedges of net investments |
- |
- |
- |
- |
(6.9) |
- |
(6.9) |
- |
(6.9) |
|
Movements on cash flow hedges |
- |
- |
- |
- |
0.1 |
- |
0.1 |
- |
0.1 |
|
Actuarial gains on defined benefit pension schemes net of deferred tax |
- |
- |
- |
- |
- |
1.4 |
1.4 |
- |
1.4 |
|
Total comprehensive income for the year |
- |
- |
- |
(10.0) |
(6.8) |
56.3 |
39.5 |
- |
39.5 |
|
Ordinary shares acquired |
(1.6) |
- |
- |
- |
1.6 |
(30.0) |
(30.0) |
- |
(30.0) |
|
Settlement of share awards |
- |
- |
4.6 |
- |
(4.0) |
(0.6) |
- |
- |
- |
|
Share-based payments |
- |
- |
- |
- |
3.4 |
- |
3.4 |
- |
3.4 |
|
Dividends |
- |
- |
- |
- |
- |
(40.8) |
(40.8) |
(0.1) |
(40.9) |
|
31 December 2025 |
30.0 |
177.1 |
(6.5) |
28.8 |
135.5 |
275.3 |
640.2 |
1.7 |
641.9 |
The own shares reserve represents the cost of Bodycote plc shares held by the Bodycote International Employee Benefit Trust to satisfy share-based payment awards granted under the Group’s incentive schemes. As at 31 December 2025, 944,252 (31 December 2024: 1,627,781) ordinary shares of 173/11p each that had been acquired in the market were held by the Bodycote International Employee Benefit Trust. Included within other reserves is a capital redemption reserve of £132.9m (2024: £131.3m) which consists of £129.8m (2024: £129.8m) transferred from retained earnings on the conversion of B shares into deferred shares in 2008 and 2009, and a total of £3.1m arising from the share buyback programme which commenced in 2024 and was extended in July 2025. Of the £3.1m, £1.6m was incurred in 2025. See note 8 for details.
Notes to the consolidated financial statements
Year ended 31 December 2025
General information
Bodycote plc is a company incorporated in the United Kingdom under the Companies Act 2006. The nature of the Group’s operations and its principal activities, and information on the Group’s objectives, are included within the Group’s Company overview and Strategic report in the 2025 Annual report.
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 UK-adopted international accounting standards as applied in accordance with the provisions of the Companies Act 2006.
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2025 or 2024 but is derived from those accounts. Statutory accounts for 2024 have been delivered to the Registrar of Companies and those for 2025 will be delivered following the Company's Annual General Meeting. The auditor has reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s.498 (2) or (3) of the Companies Act 2006.
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 July 2025 this programme was expanded to include an additional 13 plants.
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 Technologies |
Precision Heat Treatment |
Central costs and eliminations |
Total core |
Non-core |
Total Group |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Revenue |
212.3 |
459.3 |
- |
671.6 |
55.5 |
727.1 |
|
Result |
|
|
|
|
|
|
|
Adjusted operating profit/(loss) |
57.6 |
73.7 |
(18.3) |
113.0 |
1.3 |
114.3 |
|
Amortisation of acquired intangible assets |
(8.6) |
(1.1) |
- |
(9.7) |
- |
(9.7) |
|
Acquisition costs |
- |
- |
(0.1) |
(0.1) |
- |
(0.1) |
|
Operating profit/(loss) before exceptional items |
49.0 |
72.6 |
(18.4) |
103.2 |
1.3 |
104.5 |
|
Exceptional items |
(0.9) |
(3.7) |
(0.3) |
(4.9) |
(16.0) |
(20.9) |
|
Operating profit/(loss) |
48.1 |
68.9 |
(18.7) |
98.3 |
(14.7) |
83.6 |
|
Finance income |
|
|
|
|
|
0.4 |
|
Finance charges |
|
|
|
|
|
(9.5) |
|
Profit before taxation |
|
|
|
|
|
74.5 |
|
Taxation |
|
|
|
|
|
(19.1) |
|
Profit for the Year |
|
|
|
|
|
55.4 |
|
|
2024 restated |
|||||
|
|
Specialist Technologies |
Precision Heat Treatment |
Central costs and eliminations |
Total core |
Non-core |
Total Group |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Revenue |
222.3 |
459.8 |
- |
682.1 |
75.0 |
757.1 |
|
Result |
|
|
|
|
|
|
|
Adjusted operating profit/(loss) |
65.5 |
80.4 |
(20.4) |
125.5 |
3.5 |
129.0 |
|
Amortisation of acquired intangible assets |
(8.7) |
(1.7) |
- |
(10.4) |
- |
(10.4) |
|
Acquisition costs |
(2.4) |
- |
- |
(2.4) |
- |
(2.4) |
|
Operating profit/(loss) prior to exceptional items |
54.4 |
78.7 |
(20.4) |
112.7 |
3.5 |
116.2 |
|
Exceptional items |
(1.4) |
(24.4) |
(30.7) |
(56.5) |
(21.8) |
(78.3) |
|
Operating profit/(loss) |
53.0 |
54.3 |
(51.1) |
56.2 |
(18.3) |
37.9 |
|
Finance income |
|
|
|
|
|
0.8 |
|
Finance charges |
|
|
|
|
|
(10.3) |
|
Profit before taxation |
|
|
|
|
|
28.4 |
|
Taxation |
|
|
|
|
|
(7.7) |
|
Profit for the Year |
|
|
|
|
|
20.7 |
The segmental analysis has been restated to reflect the expansion of the Optimise programme in July 2025. Adjusted operating profit of the Specialist Technologies segment has been increased by £0.5m, to £65.5m, and Precision Heat Treatment decreased by £2.6m, to £80.4m. The net effect is to decrease core adjusted operating profit and increase non-core adjusted operating profit by £2.1m with no effect on the Group’s adjusted operating profit.
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 Technologies |
Precision Heat Treatment |
Total core |
Non-core |
Total Group |
|
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 Technologies |
Precision Heat Treatment |
Total core |
Non-core |
Total Group |
|
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 Technologies |
Precision Heat Treatment |
Central costs and eliminations |
Total core |
Non-core |
Total Group |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Gross capital additions |
23.2 |
59.3 |
4.4 |
86.9 |
4.4 |
91.3 |
|
Depreciation and amortisation |
23.3 |
48.6 |
3.0 |
74.9 |
5.6 |
80.5 |
|
Impairments |
- |
(0.3) |
0.3 |
- |
3.7 |
3.7 |
|
|
2024 restated |
|||||
|
|
Specialist Technologies |
Precision Heat Treatment |
Central costs and eliminations |
Total core |
Non-core |
Total Group |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Gross capital additions |
18.7 |
57.9 |
5.2 |
81.8 |
8.2 |
90.0 |
|
Depreciation and amortisation |
23.5 |
48.7 |
3.8 |
76.0 |
9.7 |
85.7 |
|
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 received 1 |
(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 3) |
(1.8) |
0.1 |
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 July 2025 to include a further 13 sites.
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 31 December 2025 including amounts charged to provisions of £6.8m (2024: £5.2m) net of provision releases of £0.6m (2024: £nil). Related severance and redundancy costs of £5.6m (2024: £4.1m) were incurred in relation to staff at sites and in central roles who were informed that they were affected by the Optimisation programme before 31 December 2025. This comprised of £6.8m (2024: £3.3m) charged to provisions net of provision releases £1.3m (2024: £nil) and £nil (2024: £0.8m) charged directly to the profit and loss account.
In November 2025 the Group sold 10 non-core sites in France. These sites were focused on serving automotive and industrial markets and were not well aligned with Bodycote’s strategic focus areas. Cash consideration of £19.3m was received for the assets sold with a loss on disposal of £0.9m recognised within exceptional costs. Up to the date of disposal, the plants divested achieved 2025 full year revenues of £22.4m, and operating profit before exceptional items of £0.4m. The loss on sale of business in 2024 of £2.7m, relates to the sale of the Metz Tessy business in France, consisting of a single site. See the 2024 Annual Report for further details.
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 UK rate, and as such it uses a weighted average country tax rate, rather than the UK tax rate, for the reconciliation of the charge for the year to the profit before taxation per the consolidated income statement as this provides the most meaningful information to the users of the financial statements. The weighted average corporation tax rate was 25.1% in 2025 (2024: 25.1%). The OECD Pillar II GloBE Rules do not have a material impact on the Group’s current tax charge and the Group has applied the exception in IAS 12 and has not recognised, or disclosed, information about deferred tax assets and liabilities related to these rules.
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 determining taxable profit |
2.0 |
1.6 |
|
Impact of recognition or derecognition of deferred tax balances |
(0.6) |
0.8 |
|
Tax effect of other adjustments in respect of previous years: |
|
|
|
Current tax 1 |
- |
1.5 |
|
Deferred tax 1 |
1.2 |
(1.3) |
|
Effect of financing activities between jurisdictions 2 |
(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 liabilities |
(0.8) |
(0.2) |
|
Other tax risk provision movements 3 |
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 UK and overseas tax positions.
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 attributable to equity holders of the parent |
54.9 |
20.0 |
|
|
Number |
Number |
|
Number of shares |
|
|
|
Weighted average number of ordinary shares for the purpose of basic earnings per share |
176,816,708 |
186,012,493 |
|
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 purpose of diluted earnings per share |
177,226,391 |
186,879,835 |
|
|
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 31 December 2025, the performance conditions have only been met for some of the Group’s open share plans. Those plans result in nil dilution of earnings per share and 0.1p dilution in adjusted earnings per share (2024: 0.1p and 0.2p dilution respectively).
6. Goodwill
|
|
|
|
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 |
Goodwill acquired through a business combination is allocated to the groups of CGUs that are expected to benefit from the synergies of the combination. Goodwill is tested for impairment at least annually or more frequently if there are indications that its carrying value may not be recoverable. To test the goodwill for impairment, the carrying value of the groups of CGUs containing goodwill are compared to their recoverable amounts, calculated as the higher of their fair value less costs to dispose and value in use.
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 31 December 2025 the Group has reassessed the level at which goodwill is monitored internally and, following this reassessment, it has concluded that the lowest level at which management reviews goodwill is now the following six groups of CGUs:
• HIP
• S 3 P
• Surface Technology (‘ST’)
• Global Automotive and General Industrial (‘AGI’), excluding Emerging markets
• Global Aerospace, Defence and Energy (‘ADE’)
• Emerging markets
A summary showing how the CGUs at 31 December 2024 were combined into the above groups of CGUs is set out below:
|
|
|
|
Goodwill |
|
|
|
|
2024 |
|
Group of CGUs |
CGUs |
|
£m |
|
HIP |
North America HIP |
|
3.9 |
|
Europe HIP |
|
2.2 |
|
|
Total HIP |
|
6.1 |
|
|
ST |
Europe ST |
|
12.6 |
|
North America ST |
|
28.5 |
|
|
Total ST |
|
41.1 |
|
|
S 3 P |
Total S 3 P |
|
nil |
|
Total Specialist Technologies |
|
|
47.2 |
|
AGI |
Europe AGI 1 |
|
24.9 |
|
North America AGI |
39.4 |
||
|
Total AGI |
|
64.3 |
|
|
ADE |
UK ADE |
|
11.0 |
|
North America ADE |
69.7 |
||
|
France and Belgium ADE |
1.2 |
||
|
Total ADE |
|
81.9 |
|
|
Emerging markets |
Eastern Europe AGI |
|
11.6 |
|
Asia AGI |
|
nil |
|
|
Total Emerging markets |
11.6 |
||
|
Total Precision Heat treatment |
|
|
157.8 |
|
Non-core 1 |
|
|
2.0 |
|
Total Goodwill |
|
|
207.0 |
1 £2m of goodwill that was reported within the Europe AGI CGU at 31 December 2024 was re-allocated to Non-core following the expansion of the Group's Optimise Programme in 2025.
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 31 December 2025. Prior to aggregating the goodwill, the Group undertook an impairment indicator assessment based on the CGUs that formed the basis of the impairment test at 31 December 2024. No indicators of impairment in respect of those CGUs were identified
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 31 December 2025 as well as other capital expenditure and growth initiatives planned. Such actions are not permitted to be reflected in the value in use calculations as at 31 December 2025. Because the majority of the inputs into the fair value calculations are not observable, they are categorised as level 3 in the fair value hierarchy.
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%).
Goodwill is allocated to the Group’s reportable segments as set out below:
|
|
|
|
2025 |
2024 1 |
|
|
|
|
£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 July 2025. As a result, 2024 goodwill in the non-core segment has increased by £2m and Precision Heat Treatment has decreased by £2m. See note 1 for further details.
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. Goodwill of £2.0m, related to the 10 French sites disposed in 2025, was allocated to the non-core segment based on the relative fair value of the business sold and the group of CGUs to which it previously belonged.
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 carrying value |
Long-term growth rate |
Post-tax discount rate |
Pre-tax discount 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 |
|
S 3 P |
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 31 December 2025 (2024: £18.0m impairment recorded in respect of the NA AGI CGU, which is now part of the AGI CGU).
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 December 2024, the Group announced that it had commenced the Optimise programme. This programme includes undertaking a number of actions to continue to drive step changes and improvements across the Group, primarily centred on sites utilising older, more commoditised technologies with higher carbon footprints. As described below, a number of provisions have been made as a result of that programme. Refer to the strategic report in the 2025 Annual report for further information of this programme.
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 31 December 2025.
8. Share capital
|
|
Ordinary Shares |
Share Capital 1 |
||
|
|
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 July 2025. The first tranche of the programme was for £60m and completed in 2025. A total of 8,979,759 shares were repurchased, including 421,083 purchased in 2025, for a total price including transactional costs of £60.4m, of which £2.7m was paid in cash in 2025. The first extension of the programme of £30m, announced in December 2024, completed in July 2025 with a total of 5,166,009 shares repurchased for a total price including transactional costs of £30.2m. In July 2025 the Group announced a further extension of £30m to the share buyback programme. A total of 3,814,329 shares have been repurchased in relation to this extension for a total price including transactional costs of £24.7m. As at 31 December 2025 a liability of £5.3m remained for shares contracted to be repurchased but for which the repurchases were still outstanding (2024: £32.9m).
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 17 3/11 p |
|
|
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 31 December |
16.1 |
16.1 |
27.8 |
28.7 |
|
Total dividend |
23.0 |
23.0 |
39.8 |
41.4 |
The 2024 final dividend of 16.1p per share was paid on 5 June 2025. The 2025 interim dividend of 6.9p per share was paid on 6 November 2025. The proposed final dividend for 2025 of 16.1p, to be paid on 11 June 2026 to shareholders on the register at close of business on 1 May 2026, is subject to approval at the AGM on 27 May 2026 and therefore is not included as a liability in these consolidated financial statements.
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 USA relating to the refund of a pension surplus which the Group intends to use to fund future pension contributions for its USA employees to avoid the full amount becoming subject to regulatory restrictions in the USA.
11. Post balance sheet events
Acquisition of Spectrum Thermal Processing LLC
On 14 January 2026 the Group acquired 100% of the ordinary share capital of Spectrum Thermal Processing LLC (‘Spectrum’) in North America for a total gross consideration of £5.9m ($8.0m) on a cash and debt free basis which was settled through the Group’s existing cash and borrowing facilities. Spectrum is a Precision Heat Treatment business supplying the Aerospace and Defence markets and brings well established Nadcap-accredited capabilities in the Northeast US, spanning a range of high-quality Precision Heat Treatment processes complementing the Aerospace and Defence strategy in North America.
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 10 March 2026 the Group announced its intention to launch a share repurchase programme of up to £80.0m expected to be completed by the end of 2027, commencing on 11 March 2026. No amounts are included in these financial statements in respect of
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 France in 2025 (see note 3 for more information) and these have been excluded from the organic results in 2025 and 2024. Metz Tessy, which was sold in December 2024, has been excluded from the organic results for 2024.
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 July 2025 (see note 1 for details).
Adjusted operating profit
Adjusted operating profit is reconciled to Operating Profit in note 1 to the financial statements.
Adjusted operating margin
|
|
2025 |
|||||
|
|
Specialist Technologies |
Precision Heat Treatment |
Central cost
|
Total core |
Non-core |
Consolidated |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Revenue |
212.3 |
459.3 |
- |
671.6 |
55.5 |
727.1 |
|
Adjusted Operating Profit |
57.6 |
73.7 |
(18.3) |
113.0 |
1.3 |
114.3 |
|
Adjusted operating margin (%) |
27.1% |
16.0% |
n/a |
16.8% |
2.3% |
15.7% |
|
|
2024 Restated |
|||||
|
|
Specialist Technologies |
Precision Heat Treatment |
Central cost
|
Total core |
Non-core |
Consolidated |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Revenue |
222.3 |
459.8 |
- |
682.1 |
75.0 |
757.1 |
|
Adjusted Operating Profit |
65.5 |
80.4 |
(20.4) |
125.5 |
3.5 |
129.0 |
|
Adjusted operating margin (%) |
29.5% |
17.5% |
n/a |
18.4% |
4.7% |
17.0% |
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 Technologies |
Precision Heat Treatment |
Central cost
|
Total core |
Non-core |
Consolidated |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Revenue |
212.3 |
459.3 |
- |
671.6 |
55.5 |
727.1 |
|
Constant exchange rates adjustment |
1.8 |
6.5 |
- |
8.3 |
0.2 |
8.5 |
|
Revenue at constant currency |
214.1 |
465.8 |
- |
679.9 |
55.7 |
735.6 |
|
Less adjustments for revenue from disposals completed in the current or prior year |
- |
- |
- |
- |
(22.3) |
(22.3) |
|
Organic revenue |
214.1 |
465.8 |
- |
679.9 |
33.4 |
713.3 |
|
Adjusted operating profit |
57.6 |
73.7 |
(18.3) |
113.0 |
1.3 |
114.3 |
|
Constant exchange rates adjustment |
0.5 |
1.3 |
- |
1.8 |
- |
1.8 |
|
Adjusted operating profit at constant currency |
58.1 |
75.0 |
(18.3) |
114.8 |
1.3 |
116.1 |
|
Less adjustments for operating profit from disposals completed in the current or prior year |
- |
- |
- |
- |
(2.1) |
(2.1) |
|
Organic adjusted operating profit |
58.1 |
75.0 |
(18.3) |
114.8 |
(0.8) |
114.0 |
|
|
2024 Restated |
|||||
|
|
Specialist Technologies |
Precision Heat Treatment |
Central cost
|
Total core |
Non-core |
Consolidated |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
Revenue at constant currency |
222.3 |
459.8 |
- |
682.1 |
75.0 |
757.1 |
|
Less adjustments from disposals completed in the prior year |
- |
- |
- |
- |
(28.6) |
(28.6) |
|
Organic revenue |
222.3 |
459.8 |
- |
682.1 |
46.4 |
728.5 |
|
Adjusted operating profit at constant currency |
65.5 |
80.4 |
(20.4) |
125.5 |
3.5 |
129.0 |
|
Less adjustments from disposals completed in the prior year |
- |
- |
- |
- |
(3.4) |
(3.4) |
|
Organic adjusted operating profit |
65.5 |
80.4 |
(20.4) |
125.5 |
0.1 |
125.6 |
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 business |
|
18.1 |
10.4 |
|||
|
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 Technologies |
Precision Heat Treatment |
Central cost
|
Total core |
Non-core |
Consolidated |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
|
|
|
|
|
|
|
|
Adjusted operating profit |
57.6 |
73.7 |
(18.3) |
113.0 |
1.3 |
114.3 |
|
Average capital employed |
313.6 |
531.7 |
(62.9) |
782.4 |
22.2 |
804.6 |
|
Return on capital employed (%) |
18.4% |
13.9% |
n/a |
14.4% |
5.8% |
14.2% |
|
|
2024 Restated |
|||||
|
|
Specialist Technologies |
Precision Heat Treatment |
Central cost
|
Total core |
Non-core |
Consolidated |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
|
|
|
|
|
|
|
|
Adjusted operating profit |
65.5 |
80.4 |
(20.4) |
125.5 |
3.5 |
129.0 |
|
Average capital employed |
308.0 |
530.4 |
(57.0) |
781.4 |
41.5 |
822.9 |
|
Return on capital employed (%) |
21.3% |
15.2% |
n/a |
16.1% |
8.4% |
15.7% |
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