Bodycote plc - 2026 Interim Results
H1 in line with expectations; FY Outlook unchanged
Group summary Adjusted1 Statutory
Half year Half year Half year Half year
2026 2025 Change 2026 2025 Change
Revenue £381.2m £369.0m +3.3% £381.2m £369.0m +3.3%
Operating £61.0m £55.1m +10.7% £45.6m £41.2m +10.7%
profit
Operating 16.0% 14.9% +110bps 12.0% 11.2% +80bps
margin
Operating £41.6m £37.7m +10.3% £62.4m £65.8m -5.2%
cash flow
Basic 25.2p 21.3p +18.3% 18.1p 15.5p +16.8%
earnings per
share2
Interim 7.2p 6.9p +4.3%
dividend per
share
Core summary1 Half year Half year Organic
2026 2025 Change1
Revenue £372.0m £336.6m +9.6%
Adjusted operating profit £60.4m £53.5m +11.0%
Adjusted operating margin 16.2% 15.9% +30bps
Excludes Non-Core sites included in the Optimise programme
Highlights
· Core organic revenue growth of 9.6%, in-line with expectations (Group: 3.3%
growth, 6.5% organic)
· Strong growth delivered in our target markets of Aerospace & Defence,
Industrial Gas Turbines, Medical, Semiconductors; partly offset by continued
weakness in Automotive, particularly in Europe
· Growth led by Specialist Technologies, with organic revenue up 16.7%,
reflecting favourable end market mix and Aerospace programme exposure. Precision
Heat Treatment organic growth of 6.4%
· Core adjusted operating margins +30bps to 16.2%; growth and Optimise
benefits partly offset by higher variable pay and growth project ramp-up costs.
Group +110bps as Non-Core scale reduces
· Group adjusted operating profit up 10.7% to £61.0m (Core: £60.4m); Statutory
operating profit up 10.7% to £45.6m
· Adjusted basic EPS up 18.3% at 25.2p (H1 25: 21.3p), statutory EPS of 18.1p
(H1 25: 15.5p)
· Optimise programme on-track with benefits building. Exploring options to
expand programme to include additional sites exposed to more challenging
Automotive and Industrial regional markets
· Interim dividend of 7.2p (+4.3%); £12.6m spend in the first half under the
current £80m share buyback programme (1.9m shares bought)
· FY26 outlook unchanged: expect to deliver organic revenue growth and margin
improvement, supported by Optimise benefits and despite higher variable pay and
growth investment costs; expect further strategic progress in H2 and remain
confident in the delivery of our mid-term targets
Commenting, Jim Fairbairn, Chief Executive Officer, said:
"We progressed well in the first half and have achieved results in line with our
expectations. Organic growth was supported by strong demand across our target
end markets, partly offset by the ongoing structural weakness in Western
European Automotive.
We continue to execute on our Optimise, Perform and Grow strategy. In light of
the success of the Optimise programme to-date, as well as continued challenges
in some of our Automotive and Industrial regional markets, we are exploring the
potential to expand the programme's scope. In Perform, we have rolled-out more
advanced operational excellence tools, starting at four key `lighthouse sites'.
In Grow, the Spectrum acquisition has integrated well. We are continuing to
progress with both organic investments and further M&A opportunities.
Our full year expectations are unchanged, albeit we are mindful of the current
geopolitical and macroeconomic environment. We expect to deliver Core organic
revenue growth in 2026. The overall pace of revenue growth is likely to moderate
in the second half, reflecting prior year comparators. We expect operating
margins to improve in 2026, driven by revenue growth and Optimise benefits,
partly offset by a normalisation of variable remuneration and the operational
ramp-up costs on our new growth initiatives. We remain confident in the delivery
of our medium term 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 2026 Interim Results.
2 An earnings per share reconciliation is provided in note 4 to the
condensed consolidated interim financial statements.
END
Interim Results Presentation
Bodycote will host an in-person presentation for investors and analysts at 8.45
am GMT on 28 July 2026.The presentation will also be webcast live. Please find
connection instructions below:
Webcast: https://www.bodycote.com/webcastHY2026 (https://www.investis
-live.com/bodycote/6a3b99de2b12bb000f9f6727/rgher)
Conference call details:
United Kingdom (Local): +44 20 3936 2999
United Kingdom (Toll-Free): +44 808 189 0158
Global Dial-In
Numbers (https://url.us.m.mimecastprotect.com/s/vK14CgJ7xYFYVGxrsohOc4YP89?domain
=netroadshow.com)
Access Code: 899146
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 FTI Consulting
Jim Fairbairn, Group Chief Executive Richard Mountain
Ben Fidler, Chief Financial Officer Edward Knight
Peter Lapthorn, Investor Relations & FP&A Tel: +44 203 727 1340
Tel: +44 1625 505 300
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.
Core overview
Core revenue was £372.0m in the first half (H1 25: £336.6m), reflecting organic
growth of 9.6% together with a contribution from Spectrum Thermal Processing LLC
(`Spectrum'), acquired in January 2026.
The organic growth was led by Aerospace & Defence (A&D) up 25%, with strong
performances across Commercial Aerospace, Defence and Space. Prior year
comparators in A&D were soft due to industry-wide supply chain disruptions in H1
2025. Energy revenue increased 5%, led by Industrial gas turbines (IGT) up 11%,
with rising demand linked to data centres; Oil & Gas revenue was broadly stable
(-2%). Consumer, Medical & Other grew 15%, with Medical returning to good growth
and strong demand in Electronics relating to semiconductors. This broad-based
growth across our target end markets was partly offset by continued weakness in
Automotive (-4%), where conditions remain challenging, particularly in Western
Europe. Industrial Markets revenue was broadly stable (+1%), with Europe
performing better than North America.
By division, Specialist Technologies delivered +16.7% organic growth, reflecting
its attractive end market mix and Aerospace programme exposures, as well as a
softer prior year comparator (H1 25: -8%). Precision Heat Treatment delivered
organic growth of +6.4% (H1 25: -2%), which included a modest benefit from
Optimise revenue transfers from Non-Core sites.
Core adjusted operating profit was £60.4m (H1 25: £53.5m) with adjusted
operating margins up 30bps to 16.2% (H1 25: 15.9%). This reflects the good
revenue growth and delivery of further Optimise benefits, and was delivered
despite the expected headwinds from higher variable pay, as this returns to more
normalised levels, and temporary ramp-up costs in our new growth projects.
Group overview
Including Non-Core businesses, total Group revenue was £381.2m (H1 25: £369.0m),
with organic growth of 6.5%. After the impact of acquisitions, disposals and FX,
total Group growth was 3.3%. Core growth was partly offset by a 72% reduction in
Non-Core revenue to £9.2m (H1 25: £32.4m) as the Optimise programme progresses
at pace. Group adjusted operating margins increased by 110bps to 16.0%,
reflecting improved Core margins alongside the much reduced scale of our low
margin Non-Core operations, which now represent a much smaller part of the
Group's portfolio.
Group statutory operating profit was £45.6m for the year (H1 25: £41.2m). Growth
was driven by the higher adjusted operating profit, with a modestly higher
exceptional charge of £10.4m (H1 25: £9.1m) which related almost entirely to the
Optimise programme.
Basic adjusted earnings per share grew 18.3% to 25.2p (H1 25: 21.3p), driven by
the 10.7% increase in adjusted operating profit, alongside a reduction in the
Group's share count as a result of the ongoing progress on the share buyback
programme. Statutory earnings per share increased to 16.8% to 18.1p (H1 25:
15.5p).
Adjusted operating cash flow was £41.6m (H1 25: £37.7m), with stable cash
conversion of 68% (H1 25: 68%). Free cash flow was £14.5m (H1 25: £18.0m), with
the reduction driven primarily by higher cash tax. Closing net debt excluding
lease liabilities was £135.2m, with leverage at approximately 0.7x net
debt/EBITDA. Net debt increased from £104.8m at 31 December 2025, driven by
payment of the final 2025 dividend (£27.5m), the acquisition of Spectrum in
January (c.£6m) and spend on the share buyback programme (£17.8m), which more
than offset the free cash flow of £14.5m in the period.
Divisional Performance
Specialist Technologies H1 2026 H1 2025 Organic Change
Change
Revenue 121.2 104.5 16.7% 16.0%
Adjusted operating profit 31.6 27.2 16.2%
Adjusted operating margin 26.1% 26.0% +10bps
Precision Heat Treatment H1 2026 H1 2025 Organic Change
Change
Revenue 250.8 232.1 6.4% 8.1%
Adjusted operating profit 37.6 34.9 7.7%
Adjusted operating margin 15.0% 15.0% 0bps
Non-Core H1 2026 H1 2025 Organic Change
Change
Revenue 9.2 32.4 -53.2% -71.6%
Adjusted operating profit 0.6 1.6 -62.5%
Adjusted operating margin 6.5% 4.9% +160bps
Specialist Technologies revenue was £121.2m (H1 25: £104.5m). This represented
strong organic growth of 16.7%, partly reflecting the soft prior year comparator
(H1 25: -8%) which had been impacted by Commercial Aerospace industry-wide
supply chain challenges and one-off headwinds in Oil & Gas and Medical. Growth
in the period was driven primarily by A&D, which increased 37% organically due
to exposure to fast-growing programmes (e.g. the LEAP engine) as well as market
share gains, with two long term agreements renewed in the period with additional
volumes. A&D now accounts for 50% of Specialist Technologies' revenue. There was
also good growth in IGT and Medical, partly offset by continued weakness in
Automotive and Industrial Markets. Adjusted operating profit was £31.6m (H1 25:
£27.2m), with operating margins broadly stable at 26.1% (H1 25: 26.0%). The
stable margins reflected good underlying progress offset by the impact of
temporary operational ramp-up costs on new growth projects, increased variable
pay (as highlighted at our FY 2025 results) and process mix, with growth led by
our Surface Technology business which has a higher level of raw material pass
through costs.
Precision Heat Treatment revenue grew by 6.4% organically to £250.8m (H1 25:
£232.1m). Strong growth in A&D (+16%), Energy (+9%) and Consumer, Medical and
Other (+14%) was partly offset by continued weakness in Automotive (-4%), where
market conditions remain challenging, particularly in Western Europe. Industrial
markets grew modestly (+4%), including a benefit from revenue transfers from Non
-Core sites as part of the Optimise programme. This transferred revenue
initially carries a lower margin reflecting the gradual ramp-up of volumes and
additional up-front costs required at the receiving sites, with profit benefits
to increase through H2 2026 and 2027. As a result of this effect and the higher
variable pay impact, operating margins in Precision Heat Treatment were flat at
15.0% (H1 25: 15.0%).
Non-Core revenue declined by 71.6% (53.2% organic), to £9.2m (H1 25: £32.4m).
The decline reflected the continued execution on the Optimise programme,
including the impact of the sale of ten Automotive and Industrial focused sites
in France which completed in November 2025, alongside further site closures and
consolidations.
Strategic progress: Optimise, Perform, Grow
We continue to execute at pace on our strategy, with further progress across all
three pillars of Optimise, Perform and Grow.
The Optimise programme is on-track, with profit benefits building and a further
c.£1m of improvements delivered in H1, in line with our expectations. To-date,
27 out of the 31 planned plant closures, disposals and consolidations are now
complete and good progress has been achieved on overhead reductions. In light of
the success of the programme as well as continued challenges in certain end
markets, we are exploring the potential to expand the scope of the programme; no
final decisions have yet been made. The focus of this ongoing work is on the
more structurally challenged regional markets within Automotive and Industrial.
In Perform, we have initiated the roll-out of more advanced operational
excellence tools, starting at four key `lighthouse sites' in North America and
Europe. These have validated the opportunity which exists from improved
efficiency, turnaround times and new product introduction lead time. We remain
confident in delivering c.100bps margin improvement from Perform by 2028.
In Grow, we completed the acquisition of Spectrum in January 2026, increasing
our A&D capabilities in North America. It has been integrated well and delivered
a strong performance in the period. A number of key Aerospace customer Long Term
Agreement renewals and extensions were reached in H1 with increased volume
capture. We are continuing to progress across a number of organic investment
initiatives covering Specialist Technologies sites and expanding further into
our target end markets and geographies. These new investments will start to make
a positive contribution through 2027. The M&A pipeline continues to develop and
mature with the balance sheet capable of supporting selective and value
accretive transactions.
Capital allocation
We continue to focus on a balanced approach to capital allocation, aimed at
driving shareholder returns while also growing and improving the quality of the
Group's portfolio.
To this end, in the first half we deployed £33.5m in capital expenditure (H1 25:
£38.0m). This included significant investment in the key organic growth
initiatives we previously announced, including: greenfield sites in South Korea
and Mexico which are set to go-live in 2027; material HIP capacity expansions in
both Europe and North America (serving A&D); and, major upgrades to two
Precision Heat Treatment A&D sites in North America. These projects will incur
some temporary P&L cost headwinds in 2026, with revenue and profit contribution
set to ramp-up in 2027. Alongside this organic investment, we also completed the
acquisition of Spectrum in January 2026 for c.£6m; the business has been fully
integrated and is performing well with a strong performance in the period. We
have built a significant M&A pipeline which we are progressing, focused on
attractive opportunities in Specialist Technologies and our strategic target end
markets which will further enhance the quality and growth of the Bodycote
portfolio.
In the first half we returned c.£45m to shareholders, comprising £27.5m in
dividends and £17.8m on the share buyback programme, of which £12.6m relates to
the new £80m programme launched in March. Under this new programme,
approximately 1.9m shares have been acquired for a volume weighted average price
(VWAP) of ~680p. The Board has approved the payment of an interim dividend of
7.2p for 2026, an increase of 4.3% year-on-year (H1 2025: 6.9p).
Outlook
Performance in the first half was in line with our expectations. Our full year
guidance is unchanged, albeit we are mindful of the current geopolitical and
macroeconomic environment. We expect to deliver Core organic revenue growth in
2026, led by continued strong demand in A&D and IGT, partly offset by continued
challenging conditions in Automotive. The pace of growth is likely to moderate
in the second half, reflecting the shape of prior year comparators, particularly
in A&D. We expect operating margins to improve in 2026, driven by revenue growth
and further Optimise benefits, partly offset by a normalisation of variable
remuneration and a modest headwind from ramp-up costs on new growth initiatives.
Our focus remains on executing our strategy at pace and preserving agility in
our cost base.
Financial Review
Financial overview
H1 2026 H1 2025
£m £m
Revenue 381.2 369.0
Adjusted operating profit 61.0 55.1
Exceptional items (10.4) (9.1)
Amortisation of acquired intangible assets (4.8) (4.8)
Acquisition costs (0.2) -
Operating profit 45.6 41.2
Net finance charge (4.4) (4.6)
Profit before taxation 41.2 36.6
Taxation charge (10.0) (8.6)
Profit for the period 31.2 28.0
Group revenue grew 3.3% to £381.2m (H1 25: £369.0m), a 6.5% increase on an
organic basis. The organic performance was driven by strong Core organic growth
(+9.6%) led by A&D and IGT, partly offset by continued weakness in Automotive.
The Core growth was partly offset by a 72% reduction in Non-Core revenue,
reflecting the execution of the Optimise programme and related plant exits and
consolidations.
Group adjusted operating profit was £61.0m in the period (H1 25: £55.1m). The
profit growth of 10.7% reflected the higher Core revenue alongside further
Optimise benefits. Group margins increased by 110bps to 16.0%, reflecting the
impact of growth and benefits of the Optimise programme on the shape and quality
of the Group's portfolio. Statutory operating profit increased to £45.6m (H1 25:
£41.2m) due to the higher adjusted operating profit, with exceptional items
modestly higher year-on-year at £10.4m (H1 25: £9.1m).
Exceptional items
Exceptional charges in the period were £10.4m (H1 25: £9.1m), relating almost
entirely to the previously disclosed costs of the Optimise programme. This
programme is improving the quality of our portfolio and its financial
performance, through the exit and consolidation of a number of poor performing
sites. The charge in the period included site closure costs, severance cost
provisions, asset impairments and other related costs.
Further detail can be found in note 2 to the condensed consolidated interim
financial statements.
Net finance charge
The net finance charge was broadly stable year-on-year at £4.4m, as summarised
in the table below:
H1 2026 H1 2025
£m £m
Interest on loans and bank overdrafts (2.0) (1.8)
Lease and other interest charges (1.3) (1.9)
Finance and bank charges (1.3) (1.1)
Total finance charges (4.6) (4.8)
Interest received 0.2 0.2
Net finance charge (4.4) (4.6)
The stable charge reflects modestly higher interest costs and finance and bank
charges, offset by lower lease and other interest charges. The Group has access
to a £251m Revolving Credit Facility maturing in September 2030. The Group's
committed facilities at 30 June 2025 totalled £260m. At 30 June 2026 the Group
had available liquidity in committed facilities of £127.4m.
Taxation
The tax charge for the period was £10.0m (H1 25: £8.6m). The adjusted tax rate
for the Group was 23.5% (H1 25: 24.2%), before accounting for amortisation of
acquired intangibles, acquisition costs and exceptional items. This was in line
with our expectations. The effective statutory tax rate was 24.3% (H1 25:
23.5%).
Earnings per share
Basic adjusted earnings per share increased by 18.3% to 25.2p (H1 25: 21.3p),
reflecting the higher level of adjusted operating profit in the period alongside
a lower share count as a result of the share buyback programme. Basic statutory
earnings per share for the year increased 16.8% to 18.1p (H1 25: 15.5p)
reflecting the improved statutory profit and reduced share count. Note 4 of the
condensed consolidated interim financial statements provides further details of
the basis of these calculations.
Management cash flow
H1 2026 H1 2025
£m £m
Adjusted operating profit 61.0 55.1
Depreciation and amortisation 34.4 35.1
Other, including impairment and profit on disposal of PPE (1.0) -
Adjusted EBITDA1 94.4 90.2
Net capital expenditure (33.5) (38.0)
Principal elements of lease payments (6.9) (6.8)
Provisions movement 0.2 (0.1)
Working capital movement (12.6) (7.6)
Adjusted operating cash flow 41.6 37.7
Restructuring (9.5) (7.0)
Net finance costs (4.0) (4.0)
Net tax (13.6) (8.7)
Free cash flow 14.5 18.0
Net lease liability additions and disposals 5.0 4.3
Ordinary dividend (27.5) (28.8)
Net acquisition cash flow (5.0) -
Ordinary shares purchased for share buyback programme (17.8) (30.9)
Own shares purchased less share-based payments 3.4 2.1
Increase in net debt (27.4) (35.3)
Opening net debt (165.5) (131.8)
Foreign exchange movements 2.0 (3.2)
Closing net debt (190.9) (170.3)
Lease Liabilities 55.7 57.8
Net debt excluding lease liabilities (135.2) (112.5)
1Refer to the APM section for a reconciliation of EBITDA to Adjusted EBITDA
Adjusted operating cash flow increased to £41.6m (H1 25: £37.7m), primarily
reflecting the higher adjusted operating profit with cash conversion stable at
68% (H1 25: 68%).
Net capital expenditure was £4.5m lower year-on-year at £33.5m.The reduction
largely reflects the phasing of spend on larger projects, with investment
increasing in the second half. Working capital was an outflow of £12.6m (H1 25:
£7.6m) as a result of higher receivables driven by the level of revenue growth
in the period compared with the prior year.
Free cash flow reduced modestly to £14.5m (H1 25: £18.0m), driven by higher
restructuring spend and cash tax. Restructuring cash spend increased to £9.5m
(H1 25: £7.0m) which reflected spend to deliver the Optimise programme with
significant site closure and consolidations taking place in the period. Net tax
outflow increased to £13.6m (H1 25: £8.7m), partly reflecting phasing as well as
our expectations for a higher level of cash tax in 2026.
Closing net debt was £135.2m excluding lease liabilities, up from £104.8m at 31
December 2025. The increase was driven by shareholder returns on the dividend
(£27.5m) and the share buyback programme (£17.8m), alongside the impact of the
acquisition of Spectrum (£5.5m), which more than offset the £14.5m free cash
flow in the period.
Group principal risks and uncertainties
The Board is committed to protecting and enhancing the Group's interests through
the effective management of risk. As a global business operating in 22
countries, we understand that effectively managing risk underpins the successful
performance of the Group.
The Board has ultimate responsibility for the Group's systems of risk management
and internal control and ensures that they are robust, monitored and evolving to
address changing business conditions and threats. The Board provides direction
and sets the tone on the importance of risk management, promoting a strong
ethical culture within the business. The tone is supported by the Group's
purpose and values, Code of Conduct and ways of working, all of which were
updated and re-launched during 2025.
The review of financial risk exposure (and twice-yearly review of the system of
internal control and risk management) has been delegated to the Group's Audit
Committee. The Directors have undertaken a detailed review of the Group's
principal and emerging risks including those that would threaten the Group's
business model, future performance, solvency and liquidity throughout the period
and no material changes were made.
Emerging risks
The Board is satisfied that an ongoing process of identifying, evaluating and
managing the Group's principal risks has been in place in the period ending 30
June 2026. The Group's risk framework defines clear roles, responsibilities and
accountabilities for risk management based on the 3-Lines of Defence model and
continues to develop in line with the Group's strategy and organisation.
The Group considers emerging risks to be those that may materialise in the
future but for which the nature or impact is not clear. They are discussed by
the Board throughout the year alongside the Group's principal risks. The Group's
risks have been considered in the broader context of the geopolitical and macro
-economic environments globally and in the countries in which the Group
operates. The dynamic and volatile nature of such risks is such that the
changing nature and potential impacts of these risks are closely monitored
throughout the year. Emerging risk is mitigated by the fact that Bodycote has a
global network of sites which allow it to service customers from multiple
locations, such that the residual risk exposure is not considered significant.
Other risks include rapidly changing technological risks such as information
security threats and the exponential increase in agentic AI. Changes in the
supply chain (such as supply chain migration to lower cost/developing economic
environments) are monitored on an ongoing basis in key meetings throughout the
year.
The Group's principal risks are those that are material and which have the
potential to have a significant impact on the Group's operations.
Group principal risks
The principal risks and uncertainties outlined in the strategic report of the
2025 Annual Report set out a description of the Group's principal risks and
related mitigation measures, as agreed by the Board, and describe how these
principal risks may affect Bodycote's ability to deliver its strategy. The risks
have been reviewed in the period to 30 June 2026 and no material changes were
made. The identified principal risks relate to:
Market and customer Operational
Markets; andCustomer service;
Competitor activity.Quality and accreditations;
Business interruption;
Critical equipment;
Investment and capital deployment; and
Information systems and security (Cyber).
Corporate Environmental
Health and safety;Climate change.
Legal, regulatory and compliance; and
People and capability.
Further details of these principal risks and associated risk management
processes, including financial risks, can be found on pages 31 to 37 of the 2025
Annual Report.
Alternative performance measures (APMs)
To provide additional information and analysis and to enable a full
understanding of the Group's results, management makes use of several APMs in
its internal management of the business and as part of its internal and external
reporting. A definition of the Group's APMs, the reasons that they are used and
a reconciliation to the Group's IFRS results can be found in the APMs section
below.
Going concern
As described in the condensed consolidated interim financial statements, the
Directors have formed a judgement, at the time of approving the condensed
consolidated interim financial statements, that there are no material
uncertainties that cast doubt on the Group's ability to continue as a going
concern and that they have a reasonable expectation that the Group has adequate
resources to continue in operational existence for a period of at least 12
months from the date of signing these condensed consolidated interim financial
statements. In making this judgement the Directors have considered the impacts
of potential severe but plausible downsides that may affect the Group's
activities. For this reason the Directors have a reasonable expectation that the
Group has sufficient resources to continue in operation over the going concern
period and continue to adopt the going concern basis in preparing the condensed
consolidated interim financial statements.
Responsibility statement
We confirm to the best of our knowledge that:
(a)the unaudited condensed consolidated half yearly financial statements
("condensed consolidated interim financial statements") have been prepared in
accordance with UK adopted IAS 34 Interim Financial Reporting;
(b)the 2026 Interim Results include a fair review of the information required by
DTR 4.2.7R (indication of important events during the first six months and
description of principal risks and uncertainties for the remaining six months of
the year); and
(c)the 2026 Interim Results include a fair review of the information required by
DTR 4.2.8R (disclosure of related parties' transactions and changes therein).
This responsibility statement was approved by the Board of Directors on 27 July
2026 and is signed on its behalf by order of the Board:
J. FairbairnB. Fidler
Chief Executive OfficerChief Financial Officer
27 July 202627 July 2026
Cautionary statement
These 2026 Interim Results have been prepared solely toprovideadditional
information to shareholders to assess the Group's strategies and the potential
for those strategies to succeed. The2026 Interim Results should not be relied on
by any other party or for any other purpose.
These 2026 Interim Results contain certain forward-looking statements. These
statements are made by the Directors in good faithbased on the information
available to them up to the time of their approval of this Report and such
statements should be treated with caution due to the inherent uncertainties,
including both uncertainties arising from economic and business risk factors,
underlying any such forward looking information.
Independent review report to Bodycote plc
Report on the unaudited condensed consolidated interim financial statements
Our conclusion
We have reviewed Bodycote plc's unaudited condensed consolidated interim
financial statements (the "interim financial statements") in the 2026 Interim
Results of Bodycote plc for the 6 month period ended 30June2026 (the "period").
Based on our review, nothing has come to our attention that causes us to believe
that the interim financial statements are not prepared, in all material
respects, in accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
The interim financial statements comprise:
● the Unaudited condensed consolidated interim balance sheet as at
30June2026;
● the Unaudited condensed consolidated interim income statement and the
Unaudited condensed consolidated interim statement of comprehensive income for
the period then ended;
● the Unaudited condensed consolidated interim cash flow statement for
the period then ended;
● the Unaudited condensed consolidated interim statement of changes in
equity for the period then ended; and
● the explanatory notes to the interim financial statements.
The interim financial statements included in the 2026 Half Year Results of
Bodycote plc have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, `Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the Financial Reporting Council for
use in the United Kingdom ("ISRE (UK) 2410"). A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
We have read the other information contained in the 2026 Half Year Results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed in
an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the Directors have
inappropriately adopted the going concern basis of accounting or that the
Directors have identified material uncertainties relating to going concern that
are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the Group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the Directors
The 2026 Interim Results, including the interim financial statements, is the
responsibility of, and has been approved by the Directors. The Directors are
responsible for preparing the 2026 Interim Results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the 2026 Interim Results, including
the interim financial statements, the Directors are responsible for assessing
the Group's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the 2026 Interim Results based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures that
are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report.
Use of this report
This report, including the conclusion, has been prepared for and only for the
Company for the purpose of complying with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority and for no other purpose. We do not, in giving this conclusion, accept
or assume responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
27July2026
Unaudited condensed consolidated interim income statement
Half year to 30 June Half year to 30 June
2026 2025
Note £m £m
Revenue 1 381.2 369.0
Cost of sales and (328.7) (320.2)
overheads1
Other operating 5.0 2.5
income1
Other operating (0.7) (0.6)
expenses1
Net impairment losses (0.8) (0.4)
on financial assets1
Operating profit 1 56.0 50.3
before exceptional
items
Exceptional items 2 (10.4) (9.1)
Operating profit 45.6 41.2
Finance income 0.2 0.2
Finance charges (4.6) (4.8)
Profit before 41.2 36.6
taxation
Taxation charge 3 (10.0) (8.6)
Profit for the period 31.2 28.0
Attributable to:
Equity holders of the 31.0 27.7
Parent
Non-controlling 0.2 0.3
interests
31.2 28.0
Earnings per share 4 Pence Pence
Basic 18.1 15.5
Diluted 18.1 15.5
1Excludes exceptional items. Total cost of sales and overheads, including
exceptional items are £335.8m (30 June 2025: £320.6m), other operating income
including exceptional items is £5.3m (30 June 2025: £2.5m), other operating
expenses including exceptional items are £4.4m (30 June 2025: £9.3m), and net
impairment losses on financial assets including exceptional items are £0.7m (30
June 2025: £0.4m).
Unaudited condensed consolidated interim statement of comprehensive income
Half year to 30 June Half year to 30 June
2026 2025
£m £m
Profit for the period 31.2 28.0
Items that may be reclassified
subsequently to profit or loss:
Exchange gains/(losses) on 2.8 (27.1)
translation of overseas
operations
Movements on hedges of net 1.8 (3.2)
investments
Movements on cash flow hedges (0.6) 0.1
Total other comprehensive 4.0 (30.2)
income/(expense) for the period
Total comprehensive 35.2 (2.2)
income/(loss) for the period
Attributable to:
Equity holders of the parent 35.1 (2.1)
Non-controlling interests 0.1 (0.1)
35.2 (2.2)
Unaudited condensed consolidated interim balance sheet
30 June 31 December
2026 2025
Note £m £m
Non-current assets
Goodwill 5 201.0 200.5
Other intangible assets 99.3 99.2
Property, plant and equipment 476.7 477.7
Right-of-use assets 49.5 54.3
Deferred tax assets 4.2 3.4
Trade and other receivables 2.3 2.6
833.0 837.7
Current assets
Inventories 32.1 28.7
Current tax assets 12.0 13.0
Trade and other receivables 167.6 145.2
Cash and bank balances 23.2 25.2
234.9 212.1
Assets held for sale 6 5.1 3.8
Total assets 1,073.0 1,053.6
Current liabilities
Trade and other payables 154.3 122.2
Current tax liabilities 30.9 34.3
Borrowings 8 2.5 0.8
Lease liabilities 12.6 13.6
Provisions 7 10.2 13.1
210.5 184.0
Net current assets 24.4 28.1
Non-current liabilities
Borrowings 8 155.9 129.2
Lease liabilities 43.1 47.2
Retirement benefit obligations 10.1 10.3
Deferred tax liabilities 38.1 38.6
Provisions 7 2.2 2.2
Other payables 0.2 0.2
249.6 227.7
Total liabilities 460.1 411.7
Net assets 612.9 641.9
Equity
Share capital 9 29.5 30.0
Share premium account 177.1 177.1
Own shares (5.9) (6.5)
Translation reserves 31.7 28.8
Other reserves 140.1 135.5
Retained earnings 238.7 275.3
Equity attributable to equity holders of the parent 611.2 640.2
Non-controlling interests 1.7 1.7
Total equity 612.9 641.9
Unaudited condensed consolidated interim cash flow statement
Half year to 30 June Half year to 30 June
2026 2025
Note £m £m
Net cash from operating 12 62.4 65.8
activities
Investing activities
Purchases of property, (35.8) (38.0)
plant and equipment
Proceeds on disposal of 3.1 0.4
property, plant and
equipment
Purchases of other (0.2) (0.6)
intangible assets
Acquisition of businesses, 11 (5.5) -
net of cash acquired
Net proceeds on disposal 2 1.4 -
of business
Repayments of loans issued 0.3 0.1
Interest received 0.2 0.2
Net cash used in investing (36.5) (37.9)
activities
Financing activities
Interest paid (4.2) (4.2)
Dividends paid 10 (27.6) (28.8)
Principal elements of (6.9) (6.8)
lease payments
Drawdown of bank loans 88.2 48.4
Repayments of bank loans (61.5) (2.6)
Ordinary shares purchased 9 (17.8) (30.9)
for share buyback
Net cash used in financing (29.8) (24.9)
activities
Net (decrease)/increase in (3.9) 3.0
cash and cash equivalents
Cash and cash equivalents 24.4 16.0
at beginning of year
Effect of foreign exchange 0.2 (0.4)
rate changes
Cash and cash equivalents 12 20.7 18.6
at end of period
Unaudited condensed consolidated interim statement of changes in equity
Share Share Own Translation Other Retained Equity
Non Total
capital premium shares reserves reserves earnings
attributable -controlling equity
account to
equity
holders
of
the
interests
parent
£m £m £m £m £m £m £m
£m £m
1 January 31.6 177.1 (11.1) 38.8 141.3 290.4 668.1
1.8 669.9
2025
Profit for - - - - - 27.7 27.7
0.3 28.0
the
year
Exchange - - - (26.7) - - (26.7)
(0.4) (27.1)
differences
on
translation
of
overseas
operations
Movements on - - - - (3.2) - (3.2)
- (3.2)
hedges of net
investments
Movements on - - - - 0.1 - 0.1
- 0.1
cash flow
hedges
Total - - - (26.7) (3.1) 27.7 (2.1)
(0.1) (2.2)
comprehensive
loss for
the period
Ordinary (0.9) - - - 0.9 - -
- -
shares
acquired
Settlement of - - 4.6 - (4.1) (0.5) -
- -
share awards
Share-based - - - - 2.1 - 2.1
- 2.1
payments
Dividends - - - - - (28.7) (28.7)
(0.1) (28.8)
30 June 2025 30.7 177.1 (6.5) 12.1 137.1 288.9 639.4
1.6 641.0
1 January 30.0 177.1 (6.5) 28.8 135.5 275.3 640.2
1.7 641.9
2026
Profit for - - - - - 31.0 31.0
0.2 31.2
the
period
Exchange - - - 2.9 - - 2.9
(0.1) 2.8
differences
on
translation
of
overseas
operations
Movements on - - - - 1.8 - 1.8
- 1.8
hedges of net
investments
Movements on - - - - (0.6) - (0.6)
- (0.6)
cash flow
hedges
Total - - - 2.9 1.2 31.0 35.1
0.1 35.2
comprehensive
income
for the
period
Ordinary (0.5) - - - 0.5 (40.4) (40.4)
- (40.4)
shares
acquired
Settlement of - - 0.6 - (0.5) (0.1) -
- -
share awards
Share-based - - - - 3.4 - 3.4
- 3.4
payments
Deferred tax - - - - - 0.4 0.4
- 0.4
on share
-based
payment
transactions
Dividends - - - - - (27.5) (27.5)
(0.1) (27.6)
30 June 2026 29.5 177.1 (5.9) 31.7 140.1 238.7 611.2
1.7 612.9
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 30 June 2026, 861,269
(30 June 2025: 955,532) 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 £133.4m (30
June 2025: £132.2m) which consists of £129.8m (30 June 2025: £129.8m)
transferred from retained earnings on the conversion of B shares into deferred
shares in 2008 and 2009, and a total of £3.6m nominal value of shares arising
from share buyback programmes. The nominal value of the shares in the period up
to 30 June 2026 of £0.5m (30 June 2025 £0.9m), was transferred to the capital
redemption reserve and the remainder of the purchase price recorded within
retained earnings.
On 10 March 2026 a new share buyback programme was announced with the intention
of purchasing shares to the value of up to £80.0m which is expected to be
completed by the end of 2027, and which commenced on 11 March 2026. Refer to
note 9 of these condensed consolidated interim financial statements and the 2025
Annual Report for more information on the share buyback programmes.
Notes to the unaudited condensed consolidated interim financial statements
Basis of preparation
The unaudited condensed consolidated half yearly financial statements
("condensed consolidated interim financial statements") of the Group have been
prepared in accordance with UK-adopted international accounting standards as
applied in accordance with the provisions of the Companies Act 2006.
These condensed consolidated interim financial statements should be read in
conjunction with the consolidated financial statements for the year ended 31
December 2025, which were prepared in accordance with UK-adopted international
accounting standards as applied in accordance with the provisions of the
Companies Act 2006. The condensed consolidated interim financial statements have
been prepared on the historical cost basis, except for items that are required
by UK-adopted international accounting standards to be measured at fair value,
principally financial instruments. Historical cost is generally based on the
fair value of the consideration given up in exchange for the assets.
The financial information set out above does not constitute statutory accounts
as defined by section 434 of the UK Companies Act 2006. A copy of the statutory
accounts for the year ended 31 December 2025 have been delivered to the
Registrar of Companies. The auditors have reported on those accounts; their
report was (i) unqualified and (ii) did not contain a statement under section
498 (2) or (3) of the Companies Act 2006. These condensed consolidated interim
financial statements have not been audited.
The Group's operations are not significantly affected by seasonality. The
accounting policies have been applied consistently throughout the current and
preceding year.
Going concern
In adopting the going concern basis for preparing these condensed consolidated
interim financial statements, the Directors have considered the Group's business
activities, together with the factors likely to affect its future development,
performance and position. In addition, the Directors have considered its
principal risks and uncertainties. The Financial Review included in the 2026
Interim Results includes a summary of the Group's financial position, cash
flows, liquidity position and borrowings. The principal risks and uncertainties
are set out on pages 31-37 of the 2025 Annual Report.
The Directors have considered the current and plausible impact of macroeconomic
factors in preparing their going concern assessment, including ongoing
conflicts, energy price instability, global manufacturing trends and other
factors and risks on the Group's activities, performance and revenue. The Group
has modelled a base case, which reflects the Directors' current expectations of
future trading in addition to potential severe but plausible impacts on revenue,
profits and cash flows in a downside scenario.
In preparing the scenarios, the assessment has considered both liquidity and
compliance with the Group's covenants. The key covenants attached to the Group's
Revolving Credit Facility relate to financial gearing (net debt to EBITDA) and
interest cover, which are measured on a pre-IFRS 16 basis. The maximum financial
gearing ratio permitted under the covenants is 3.0x (with a one-time acquisition
spike at 3.5x) and the minimum interest cover ratio permitted is 4.0x. In both
the base case and the severe but plausible downside scenario modelled, the Group
continues to maintain sufficient liquidity and meet its gearing and interest
cover covenants under the Revolving Credit Facility with substantial headroom.
Management's base case scenario is built upon the budgeting and forecasting
processes for 2026 and extended up to December 2027. The Group's recent record
of cash conversion was used to estimate the cash generation and level of net
debt over that period.
The severe but plausible downside scenario assumes a significant decline in
revenue of 12% year on year in H2 2026 and a further 9% YoY decline in FY 2027.
This downside takes account of short-term negative shock events specific to the
Group's end-markets which are intentionally more severe that those used in the
impairment analysis in the year ended 31 December 2025. In mitigation to this
severe sales decline, a 10% reduction in maintenance capex and a 50% reduction
in other capex compared to the base case has been assumed, together with an
assumption that there is no growth in dividends over the period and a reduced
level of share buyback spend.
Management also performed a reverse stress test. This indicated that revenue in
the second half of 2026 would need to decline by over 34% year-on-year with a
similar decline in H1 2027, and no growth in H2 2027, before the Group's loan
covenants were breached at the December 2027 test date. In this scenario,
minimum liquidity was over £90m throughout the entire period. This scenario
included the same mitigations as the downside scenario, with an additional
reduction in capital expenditure assumed to reflect the more negative growth
environment and a larger reduction in the share buyback programme.
The Group meets its working capital requirements through a combination of
committed and uncommitted facilities and overdrafts. For the purposes of the
going concern assessment, the Directors have only taken into account the
capacity under existing committed facilities, being predominantly the Group's
Revolving Credit Facility.
The Group has access to a £251.0m Revolving Credit Facility maturing in
September 2030. The Group's other committed facilities as at 30 June 2026
totalled £9.1m. At 30 June 2026, the Group's committed facilities had total
drawings of £155.9m (31 December 2025: £129.2m) and the Group's net debt
(excluding lease liabilities) was £135.2m (31 December 2025: £104.8m). The
liquidity headroom on the committed facilities, net of cash and cash equivalents
of £23.2m, was £127.4m as at 30 June 2026 (31 December 2025: £156.2m).
Following this assessment, the Directors have formed a judgement, at the time of
approving the condensed consolidated interim financial statements, that there
are no material uncertainties that cast doubt on the Group's ability to continue
as a going concern for the foreseeable future 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 from the approval date of the
condensed consolidated interim financial statements. For this reason, the
Directors continue to adopt the going concern basis in preparing the condensed
consolidated interim financial statements.
Accounting policies
There are no changes in the Group's accounting policies, presentation and
methods of computation that have an impact on the condensed consolidated interim
financial statements from those that were applied in the Group's latest annual
audited financial statements as detailed in the 2025 Annual Report, except for
the tax charge for the interim period. To determine the tax charge the Group has
applied the forecast annual effective corporate income tax rate to the pre-tax
income for the six-month period, in accordance with IAS 34 Interim Financial
Reporting. The accounting policies have been applied consistently throughout the
current period and preceding year.
Critical accounting judgements and significant accounting estimates
Preparing the condensed consolidated interim financial statements and applying
the Group's accounting policies requires management to make estimates and
judgements that affect the amounts recognised in the condensed consolidated
interim financial statements. Although the estimates and judgements are based on
management's best information about current circumstances and future events and
actions, actual outcomes may differ which could result in material amounts being
recorded in the income statement in future periods. The Group's latest annual
audited financial statements set out the critical accounting judgements,
significant accounting estimates and the other areas of judgement and accounting
estimates that were made in preparing those financial statements. The critical
and significant accounting judgements made in applying the Group's accounting
policies to these condensed consolidated interim financial statements relate to
the recognition of tax provisions and goodwill impairment and significant
judgments relate to the determination of which costs meet the definition of
exceptional items. These areas of critical and significant judgements, and
estimation uncertainty, remain the same as the year end.
As described in the 2025 Annual Report the Group does not apply IAS 29
(Financial Reporting in Hyperinflationary Economies) to its operations in Turkey
since doing so would not have a material impact on the Group's financial
statements. The Group recognises climate change as a principal risk and in
preparing the condensed consolidated interim financial statements, it did not
have a material impact on the financial reporting judgements and estimates.
Further detail of these judgements and accounting estimates can be found in the
Group accounting policies section on pages 152-153 of the 2025 Annual Report.
Adoption of new, revised standards and interpretations applied in the current
year
The following amendments to standards became applicable during the current
reporting period. The amendments did not have a material effect on the Group's
condensed consolidated interim financial statements and the Group did not have
to change its accounting policies or make retrospective adjustments as a result
of adopting these amendments.
· Amendments to IFRS 9 and IFRS 7: Contracts referencing nature-dependent
electricity arrangements. These amendments introduce requirements for the
treatment of contracts that expose an entity to variability in the underlying
amount of electricity because the source of electricity generation depends on
uncontrollable natural conditions (for example, the weather).
Amendments to IFRS 9 and IFRS 7: the Classification and Measurement of Financial
Instruments. These amendments make various changes to the treatment of certain
financial instruments with ESG linked features and the settlement of financial
liabilities using electronic payment systems.
· Annual Improvements to IFRS Accounting Standards - Vol. 11. Volume 11 of
the IASB's annual improvements includes a number of changes that affect hedge
accounting on first time adoption, disclosures about financial instruments, the
derecognition of lease liabilities, de-facto agents, and the use of the cost
method.
New standards and interpretations not yet applied
At the date of authorisation of these condensed consolidated interim financial
statements, the Group has not applied the following new and revised IFRS
Standards and amendments that have been issued by the International Accounting
Standards Board (IASB) and endorsed for use in the UK.
· IFRS 18 Presentation and disclosure in Financial Statements: On 9 April
2024 the IASB issued IFRS 18 to replace IAS 1 Presentation of Financial
Statements with an effective date of 1 January 2027. IFRS 18 sets out
requirements for the presentation and disclosure of information in financial
statements. This standard introduces a number of new mandatory categories,
subtotals and totals to the income statement, gives further guidance on
aggregation and disaggregation of items, and introduces further requirements in
respect of management-defined performance measures. Whilst the Group does not
expect the new standard to result in changes to its profit for the year,
cashflow, or assets, the Group is reviewing its potential effect on the
presentation of the Group's financial statements including the presentation of
the income and cashflow statements and use and reconciliation of alternative
performance measures (APM's).
Notes to the unaudited condensed consolidated interim financial statements
1.Segmental analysis
The Group has 131 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 (`S3P')
business and its Surface Technology (`ST') 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
Optimise programme ("Optimise") 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, or selling them.
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 Optimise programme has been completed, they are
not allocated to the non-core segment.
In July 2025 the Group expanded its Optimise programme to include a further 13
plants, with one plant being removed from the program. Consequently the prior
year segmental analysis has been restated to reflect the updated Optimise
programme and the way that the Group is now viewed by the CODM.
Half year to
30 June 2026
Specialist Precision Central costs Total Non Total
Technologies Heat and core -core Group
Treatment eliminations
£m £m £m £m £m £m
Revenue 121.2 250.8 - 372.0 9.2 381.2
Result
Adjusted 31.6 37.6 (8.8) 60.4 0.6 61.0
operating
profit/(loss)
Amortisation (4.1) (0.7) - (4.8) - (4.8)
of acquired
intangible
assets
Acquisition - (0.2) - (0.2) - (0.2)
costs
Operating 27.5 36.7 (8.8) 55.4 0.6 56.0
profit/(loss)
before
exceptional
items
Exceptional (0.2) (1.7) (0.9) (2.8) (7.6) (10.4)
items
Operating 27.3 35.0 (9.7) 52.6 (7.0) 45.6
profit/(loss)
Finance 0.2
income
Finance (4.6)
charges
Profit 41.2
before
taxation
Taxation (10.0)
Profit for 31.2
the period
Half year to
30 June 2025
restated
Specialist Precision Central costs Total Non Total
Technologies Heat and core -core Group
Treatment eliminations
£m £m £m £m £m £m
Revenue 104.5 232.1 - 336.6 32.4 369.0
Result
Adjusted 27.2 34.9 (8.6) 53.5 1.6 55.1
operating
profit/(loss)
Amortisation (4.3) (0.5) - (4.8) - (4.8)
of acquired
intangible
assets
Operating 22.9 34.4 (8.6) 48.7 1.6 50.3
profit/(loss)
prior to
exceptional
items
Exceptional (0.1) (0.2) (1.2) (1.5) (7.6) (9.1)
items
Operating 22.8 34.2 (9.8) 47.2 (6.0) 41.2
profit/(loss)
Finance 0.2
income
Finance (4.8)
charges
Profit 36.6
before
taxation
Taxation (8.6)
Profit for 28.0
the period
The segmental adjusted operating profit has been restated to reflect the
expansion of the Optimise programme in July 2025. As a result of the
restatement, the core revenue and adjusted operating profit reduced by £15.3m
and £0.8m respectively with an equal increase in revenue and adjusted operating
profit in non-core, with no effect on the Group's revenue and adjusted operating
profit.
Inter-segment revenues are not material in either period.
The Group does not have any one customer that contributes more than 10% of
revenue in either period.
Half year to
30 June 2026
Specialist Precision Total core Non-core Total Group
Technologies Heat
Treatment
Revenue £m £m £m £m £m
Western 54.8 119.5 174.3 6.1 180.4
Europe
North 62.3 89.1 151.4 2.6 154.0
America
Emerging 4.1 42.2 46.3 0.5 46.8
Markets
Group 121.2 250.8 372.0 9.2 381.2
Half year to
30 June 2025
restated
Specialist Precision Total core Non-core Total Group
Technologies Heat
Treatment
Revenue £m £m £m £m £m
Western 51.8 107.7 159.5 23.2 182.7
Europe
North 49.3 83.1 132.4 8.6 141.0
America
Emerging 3.4 41.3 44.7 0.6 45.3
Markets
Group 104.5 232.1 336.6 32.4 369.0
2.Exceptional items
Half year to 30 June Half year to 30 June
2026 2025
£m £m
Costs associated with 0.6 -
expression of interest
Optimise programme: 9.8 9.1
Impairment of assets 1.6 1.4
Severance and 0.9 2.8
redundancy cost
Site closure and 5.2 4.5
associated costs
Gains on sale of (0.4) -
property, plant and
equipment
Loss on sale of 2.0 -
business
Other programme costs 0.5 0.4
Total exceptional items 10.4 9.1
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
programme was extended in July 2025 to include a further 13 sites. As at 30 June
2026, the Group had formally announced the closure or impact of all the affected
sites, with the majority of sites to close already completed, and remaining
affected sites working towards completion. During 2026 the Group recognised an
exceptional charge of £9.8m (30 June 2025: £9.1m) which includes costs
associated with site closures, restructuring and net loss on sale of assets.
Net impairments of £1.6m (30 June 2025: £1.4m) have been charged to exceptional
items relating to property plant and equipment that will no longer generate
benefits. This is net of an impairment reversal credit of £0.3m (30 June 2025:
£nil) for equipment that can now be utilised within the Group.
Site closure costs of £5.2m (30 June 2025: £4.5m) were incurred in respect of
closures announced before 30 June 2026, including amounts charged to provisions
of £1.7m (30 June 2025: £3.0m), net of provision releases of £0.7m (30 June
2025: £nil). Severance and redundancy costs of £0.9m (30 June 2025: £2.8m) were
incurred in the period, net of provision releases of £0.3m (30 June 2025:
£0.2m), in relation to staff at sites and in central roles who were informed
that they were affected by the Optimise programme before 30 June 2026.
An exceptional gain of £0.4m (30 June 2025: £nil) has been realised on the sale
of property, plant and equipment assets that were no longer required as a result
of Optimise. Additionally In April 2026, the Group sold a non-core site in
Austria with cash consideration received of £1.5m with a loss on disposal of
£2.0m. Up to the date of disposal for the six month period ending 30 June 2026,
the divested site achieved revenues of £0.9m, and an operating loss before
exceptional items of £0.1m.
Other programme costs of £0.5m include costs to manage and oversee the closure
of sites and to move equipment to other Bodycote sites and Optimise programme
related consultancy costs.
Refer to the 2025 Annual Report for further details of the Optimise programme.
Costs associated with expression of interest
During the year, the Group incurred £0.6m of transaction-related costs
associated with a potential acquisition of the Company by a third party, Apollo
Global Management Inc., who approached the Group with an expression of interest
to purchase the Company. The proposed transaction did not proceed to a firm
offer.
The costs comprise of legal, advisory and travel expenses incurred in evaluating
the proposal, facilitating due diligence requests and supporting discussions.
The associated costs are non-recurring and unrelated to the Group's ongoing
operations and have been classified as an exceptional item, in accordance with
the Group's accounting policy.
3.Taxation charge
Half year to 30 June Half year to 30 June
2026 2025
£m £m
Current taxation - charge for 11.0 8.7
the period
Current taxation - - 0.1
adjustments in respect of
previous years
Deferred tax - charge for the (1.0) (0.2)
period
Total taxation charge 10.0 8.6
The adjusted rate of tax for the six months ended 30 June 2026 was 23.5% (30
June 2025: 24.2%) on the adjusted profit before tax. The statutory effective tax
rate was 24.3% (30 June 2025: 23.5%). 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.
4.Earnings per share
Half year to 30 June Half year to 30 June
2026 2025
£m £m
Earnings
Earnings for the purpose of basic 31.0 27.7
earnings per share being net
profit attributable to equity
holders of the parent
Number Number
Number of shares
Weighted average number of ordinary shares 171,144,884 178,715,657
for the purpose of basic earnings per share
Effect of dilutive potential on ordinary
shares:
Shares subject to performance conditions - 68,274
Shares subject to vesting conditions 378,970 204,808
Weighted average number of ordinary shares 171,523,854 178,988,739
for the purpose of diluted earnings per
share
Pence Pence
Earnings per share:
Basic 18.1 15.5
Diluted 18.1 15.5
Half year to 30 June Half year to 30 June
2026 2025
£m £m
Adjusted earnings
Net profit attributable to 31.0 27.7
equity holders of the
parent
Add back:
Amortisation of acquired 4.8 4.8
intangible assets
Acquisition costs 0.2 -
Exceptional items 10.4 9.1
Tax on adjusted earnings (3.3) (3.6)
Adjusted earnings 43.1 38.0
Pence Pence
Adjusted earnings per share:
Basic 25.2 21.3
Diluted 25.1 21.2
As at 30 June 2026 the performance conditions have not been met for some of the
Group's open share plans. There is a nil dilution of earnings per share and 0.1p
dilution in adjusted earnings per share (30 June 2025: £nil and 0.1p dilution
respectively) as a result of open share plans.
5.Goodwill
30 June 31 December
2026 2025
£m £m
Cost
At 1 January 278.0 285.9
Exchange differences 0.8 (5.9)
Transfer to assets held for sale - (2.0)
Total cost 278.8 278.0
Accumulated impairment
At 1 January 77.5 78.9
Exchange differences 0.3 (1.4)
Total accumulated impairment 77.8 77.5
Carrying amount 201.0 200.5
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.
The lowest level at which management reviews goodwill is the following six
groups of CGUs:
· HIP
· S3P
· Surface Technology (`ST')
· Global Automotive and General Industrial (`AGI'), excluding Emerging markets
· Global Aerospace, Defence and Energy (`ADE')
· Emerging markets
Goodwill is allocated to the Group's reportable segments as set out below:
30 June 31 December
2026 2025
£m £m
Specialist Technologies 45.7 45.3
Precision Heat Treatment 155.3 155.2
201.0 200.5
A summary of the goodwill allocated to each of the groups of CGUs containing
goodwill is set out below:
Goodwill carrying value
30 June 2026
£m
Specialist technologies:
HIP 5.9
ST 39.8
S3P nil
Precision Heat Treatment:
AGI 63.5
ADE 79.7
Emerging markets 12.1
The Group performed an indicator assessment to determine whether an impairment
test was required in respect of any of its groups of CGUs as at 30 June 2026.
This assessment focused on a review of the year to date performance of the
groups of CGUs versus the budget and latest forecast, and the headroom as at 31
December 2025, to determine whether it was reasonably possible that the
performance of any group of CGUs in the six months ended 30 June 2026 could
result in an impairment. No impairment triggers were identified.
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, estimates of operational costs and future maintenance
capital expenditure. In the 2025 Annual Report, the Group 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 as at 31 December 2025.
Sensitivities related to the AGI group of CGUs disclosed in the 2025 Annual
Report highlighted that headroom would be fully eroded only in the unlikely
event that no benefits from Optimise and other initiatives were achieved and
that margins in 2030 remain 150bps below their 2023 base, the level seen before
the recent downturn in industrial and automative markets. While industrial and
automotive markets were challenging in the six months ended 30 June 2026 the
impact is well within the sensitivity headroom. On that basis, management has
concluded that no indicator of impairment exists as at 30 June 2026. However,
the sensitivity of the valuation of the group of CGUs to further adverse changes
remains. For more information of the 2025 impairment exercise including the
sensitivity analysis performed refer to note 7 of the 2025 Annual Report.
6.Assets held for sale
30 June 31 December
2026 2025
£m £m
Precision Heat Treatment - 0.2
Non-core 5.1 3.6
Total assets held for sale 5.1 3.8
All assets held for sale are in a saleable condition and are expected to be sold
within the next 12 months. The assets consist of a mix of land and buildings of
£3.9m (31 December 2025: £3.5m), plant and machinery of £0.5m (31 December 2025:
£0.3m) and right-of use assets of £0.7m (31 December 2025: £nil). Assets of
£0.7m which were held for sale as at 31 December 2025 were sold in the period.
7.Provisions
Half year to 30 June 2026
Restructuring Environmental Legal Total
£m £m £m £m
At 1 January 2026 9.1 3.2 3.0 15.3
Additions 3.9 0.6 0.4 4.9
Released (1.1) (0.1) (0.2) (1.4)
Utilisation (5.7) (0.5) (0.2) (6.4)
At 30 June 2026 6.2 3.2 3.0 12.4
Included in current liabilities 10.2
Included in non-current liabilities 2.2
12.4
In 2024 the Group announced that it had commenced the Optimise programme. Refer
to note 2 of these condensed consolidated interim financial statements and the
2025 Annual Report for further information of this programme.
Restructuring
Included in restructuring provision additions in the period ending 30 June 2026
are £3.6m (31 December 2025: £13.6m) which have been charged to exceptional
items in the unaudited condensed consolidated income statement in respect of the
Optimise programme. These charges related to the redundancy and severance of
employees who had been notified before the period ending 30 June 2026, along
with site closure costs where the announcement has been made. The cash outflows
in respect of these provisions are expected to occur within 12 months of the
balance sheet date. See note 2 for further details.
Provisions of £0.3m and £0.1m provision releases related to restructuring which
were not part of the Optimisation programme were booked to operating profit in
the period up to 30 June 2026.
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 30 June 2026.
8.Financial instruments
In accordance with IFRS 9, the Group categorises its financial instruments into
those measured at `amortised cost', `fair value through profit or loss' and
`fair value through other comprehensive Income'.
There have been no transfers of assets or liabilities between levels of the fair
value hierarchy in the periods ending 30 June 2026 and 31 December 2025. The
carrying values of financial instruments at amortised cost as presented in the
condensed consolidated interim financial statements approximate their fair
values.
Certain EUR, USD and SEK amounts are designated as net investment hedges to the
Group's subsidiaries with a matching functional currency on a 1:1 ratio.
The Group has access to a Revolving Credit Facility of £251.0m which is drawn in
EUR. As at 30 June 2026, the Group had £95.1m (31 December 2025: £121.8m)
available on the £251.0m committed Revolving Credit Facility which, together
with cash and cash equivalents of £23.2m (31 December 2025: £25.2m), and other
available committed overdraft facilities of £9.1m (31 December 2025: £9.2m),
resulted in available liquidity headroom of £127.4m (31 December 2025: £156.2m).
The Group also has available uncommitted short-term bank facilities to manage
short-term liquidity, which are excluded from the liquidity headroom policy. The
Group manages longer term liquidity through its committed bank facilities and
will, if appropriate, raise funds on capital markets.
9.Share capital
Ordinary Shares1 Share Capital2
30 June 31 December 30 June 31 December
2026 2025 2026 2025
Number Number £m £m
At 1 January 173,496,075 182,897,496 30.0 31.6
Share buyback programme (2,528,963) (9,401,421) (0.5) (1.6)
Total 170,967,112 173,496,075 29.5 30.0
1Excludes shares purchased, but not cancelled, as at 30 June 2026 of 60,000
shares (31 December 2025 £nil).
2Nominal value of shares held is 17 3/11p each.
In 2024 a £90m share buyback programme was announced, and extended in July 2025
by £30m to a total of £120m. This programme completed in 2026 with a total of
733,485 shares repurchased for a total price including transactional costs of
£5.5m which was paid in cash during the period. In the year ending 31 December
2025 a total of 9,401,421 shares were repurchased for a total price including
transactional costs of £57.6m.
On 10 March 2026 a new share buyback programme was announced with the intention
of purchasing shares to the value of up to £80m, which is expected to be
completed by the end of 2027. This programme commenced on 11 March 2026 with an
initial contract to purchase shares up to £40m. As at 30 June 2026 1,855,478
shares have been repurchased under the 2026 share buyback programme for a total
price, including transactional costs, of £12.6m, of which £12.3m was paid in
cash during the period.
As at 30 June 2026, a liability of £27.9m (31 December 2025: £5.3m) remained for
shares contracted to be repurchased, including associated costs but for which
the repurchases were still outstanding.
The nominal value of the shares purchased in the period to 30 June 2026 is £0.5m
(30 June 2025: £0.9m) which has been transferred to the capital redemption
reserve with the difference between the nominal value and the purchase price
recorded within retained earnings.
30 June 31 December
2026 2025
Shares purchased with a nominal value of 17 3/11p 2,588,963 9,401,421
Consideration excluding costs £18.0m £57.3m
Costs £0.1m £0.3m
Total consideration £18.1m £57.6m
Refer to the 2025 Annual Report for information on the share buyback programmes.
10.Dividends
2026 2025 2026 2025
Per share Per share £m £m
Interim dividend for the 7.2 6.9 12.2 12.0
year ended 31 December
Final dividend for the 16.1 16.1 27.5 28.7
prior year ended 31
December
Total dividend 23.3 23.0 39.7 40.7
The Board approved the payment of an interim dividend for 2026 of 7.2p to those
shareholders on the register of Bodycote plc on 1 October 2026 to be paid on 5
November 2026. The dividend has not been included as a liability in these
condensed consolidated interim financial statements. The 2025 final dividend of
16.1p per share was paid on 11 June 2026.
11. Acquisition of businesses
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), including deferred consideration of £0.3m to be
paid in January 2027, and receipt of £0.1m of cash and cash equivalent assets.
Consideration settled to date of £5.5m was through the Group's existing cash and
borrowing facilities on a debt free basis.
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
transaction has been accounted for as a business combination under IFRS 3. The
accounting is provisional as the Group has twelve months to finalise the
valuation of the acquired assets and liabilities under IFRS 3. The table below
summarises the provisional fair values of net assets acquired:
Provisional
Half year to 30 June
2026
£m
Fair value of net assets acquired:
Other intangible assets 4.6
Property, plant and equipment 1.0
Right-of-use assets 0.7
Trade and other receivables 0.4
Cash and cash equivalents 0.1
Trade and other payables (0.1)
Lease liabilities (0.7)
Net deferred tax liabilities (0.1)
Fair value of net assets acquired 5.9
Total consideration transferred 5.9
Net cash outflow arising on acquisition:
Cash consideration 5.9
Less: cash and cash equivalents acquired (0.1)
Less: deferred consideration (0.3)
5.5
Acquisition related costs amounted to £0.2m (30 June 2025: £nil) and have been
included in the unaudited condensed consolidated interim income statement. The
gross contractual value of the trade and other receivables was £0.5m. The best
estimate at the acquisition date of the contractual cash flows not expected to
be collected was £nil. The business contributed £2.1m revenue and £0.6m of
adjusted operating profit for the period between the date of the acquisition and
the balance sheet date.
12.Notes to the cash flow statement
Half year Half year to 30 June
to 30 June
2026 2025
£m £m
Profit for the year 31.2 28.0
Adjustments for:
Finance income (0.2) (0.2)
Finance charges 4.6 4.8
Taxation charge 10.0 8.6
Operating profit 45.6 41.2
Non-cash items reflected in
operating profit before exceptional
items:
Depreciation of property, plant and 27.0 28.2
equipment
Depreciation of right-of-use assets 6.6 6.3
Amortisation of other intangible 5.6 5.4
assets
Profit on disposal of property, (1.5) -
plant and equipment
Impairment of property, plant and 0.5 -
equipment
Non-cash items reflected in
exceptional items:
Profit on disposal of property, (0.4) -
plant and equipment
Disposal of business 2.0 -
Impairment of assets 1.6 1.4
EBITDA 87.0 82.5
Share-based payments 3.4 2.1
Increase in inventories (3.6) (1.2)
Increase in receivables (22.0) (11.2)
Increase in payables 12.7 6.9
(Decrease)/increase in provisions (2.9) 0.1
Cash generated by operations 74.6 79.2
Net income taxes paid (13.6) (8.7)
Net exchange differences 1.4 (4.7)
Net cash from operating activities 62.4 65.8
Half year to 30 June Half year to 30 June
2026 2025
£m £m
Cash and cash
equivalents
comprise:
Cash and bank 23.2 20.2
balances
Bank overdrafts (2.5) (1.6)
(included in
borrowings)
20.7 18.6
Cash and bank balances include £0.7m (30 June 2025: £0.9m) 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.
13. Related party transactions
There have been no material related party transactions since the last annual
reporting period of 31 December 2025. Transactions between subsidiaries of the
Group, which are related parties to each other, have been eliminated on
consolidation and are not therefore disclosed in this note. The notes to the
consolidated financial statements in the 2025 Annual Report disclose information
on the remuneration of the Board of Directors (note 27) who are considered key
management personnel of the Group and information on defined benefit retirement
pension schemes that the Group operates (note 25).
14.Contingent liabilities
The Group is subject to certain legal proceedings, claims, complaints and
investigations arising out of the ordinary course of business. Legal proceedings
may include, but are not limited to, alleged breach of contract and alleged
breach of environmental, competition, securities and health and safety laws. The
Group may not be insured fully, or at all, in respect of such risks. The Group
cannot predict the outcome of individual legal actions, claims, complaints or
investigations. The Group may settle litigation or regulatory proceedings prior
to a final judgment or determination of liability. The Group may do so to avoid
the cost, management effort or negative business, regulatory or reputational
consequences of continuing to contest liability, even when it considers it has
valid defences to liability. The Group considers that no material loss is
expected to result from these legal proceedings, claims, complaints and
investigations. Provision is made for all liabilities that are expected to
materialise through legal and tax claims against the Group.
Alternative performance measures (APMs) (unaudited)
The 2026 Interim Results 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 2026 results translated into GBP
using the same exchange rates as were used in 2025. 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 acquisition of Spectrum Thermal Processing LLC has been
excluded from the organic results in 2026 (see note 11 for further information).
The Group sold one site in Austria in 2026 (see note 2 for more information) and
10 sites in France in 2025 (see 2025 Annual report for more information) and
these have been excluded from the organic results.
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 12 to the condensed consolidated interim 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 Optimise 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 cashflow 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 costs of
providing the associated benefits to employees. It is presented to give an
indication of the business' 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.
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.
2025 Segmental APMs have been restated to reflect the changes to the Group's
segments as a result of the expansion of the Optimise 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
condensed consolidated interim financial statements.
Adjusted operating margin
Half year to
30 June 2026
Specialist Precision Central cost Total Non Consolidated
Technologies Heat and core -core
Treatment eliminations
£m £m £m £m £m £m
Revenue 121.2 250.8 - 372.0 9.2 381.2
Adjusted 31.6 37.6 (8.8) 60.4 0.6 61.0
Operating
Profit/(lo
ss)
Adjusted 26.1% 15.0% n/a 16.2% 6.5% 16.0%
operating
margin
(%)
Half year to
30 June 2025
restated
Specialist Precision Central cost Total Non Consolidated
Technologies Heat and core -core
Treatment eliminations
£m £m £m £m £m £m
Revenue 104.5 232.1 - 336.6 32.4 369.0
Adjusted 27.2 34.9 (8.6) 53.5 1.6 55.1
Operating
Profit/(lo
ss)
Adjusted 26.0% 15.0% n/a 15.9% 4.9% 14.9%
operating
margin
(%)
Adjusted profit before taxation
Half year to 30 June Half year to 30 June
2026 2025
£m £m
Profit 41.2 36.6
before
taxation
Add back:
Amortisation 4.8 4.8
of acquired
intangibles
Acquisition 0.2 -
costs
Exceptional 10.4 9.1
items
Adjusted 56.6 50.5
profit
before
taxation
Organic revenue and organic adjusted operating profit
Reconciled to revenue and adjusted operating profit in the table below:
Half year to
30 June 2026
Specialist Precision Central cost Total Non Consolidated
Technologies Heat and core -core
Treatment eliminations
£m £m £m £m £m £m
Revenue 121.2 250.8 - 372.0 9.2 381.2
Constant 0.7 (1.6) - (0.9) (0.2) (1.1)
exchange
rates
adjustment
Revenue at 121.9 249.2 - 371.1 9.0 380.1
constant
currency
Less - (2.2) - (2.2) (0.9) (3.1)
adjustments
for revenue
from
acquisitions
and
disposals
completed in
the current
or prior
year
Organic 121.9 247.0 - 368.9 8.1 377.0
revenue
Adjusted 31.6 37.6 (8.8) 60.4 0.6 61.0
operating
profit/(loss)
Constant 0.2 (0.3) (0.3) (0.4) - (0.4)
exchange
rates
adjustment
Adjusted 31.8 37.3 (9.1) 60.0 0.6 60.6
operating
profit/(loss)
at constant
currency
Less - (0.6) - (0.6) 0.3 (0.3)
adjustments
for
operating
profit from
acquisitions
and
disposals
completed in
the current
or prior
year
Organic 31.8 36.7 (9.1) 59.4 0.9 60.3
adjusted
operating
profit/(loss)
Half year to
30 June 2025
restated
Specialist Precision Central cost Total Non Consolidated
Technologies Heat and core -core
Treatment eliminations
£m £m £m £m £m £m
Revenue at 104.5 232.1 - 336.6 32.4 369.0
constant
currency
Less - - - - (15.1) (15.1)
adjustments
from
disposals
completed
in
the
prior year
Organic 104.5 232.1 - 336.6 17.3 353.9
revenue
Adjusted 27.2 34.9 (8.6) 53.5 1.6 55.1
operating
profit/(loss
)
at constant
currency
Less - - - - (1.7) (1.7)
adjustments
from
disposals
completed
in
the
prior year
Organic 27.2 34.9 (8.6) 53.5 (0.1) 53.4
adjusted
operating
profit/(loss
)
Adjusted EBITDA (earnings before interest, taxation, depreciation and
amortisation)
Half year Half year
to 30 June to 30 June
2026 2025
£m £m
EBITDA 87.0 82.5
Acquisition 0.2 -
costs
Exceptional 7.2 7.7
items,
excluding
gains on
sale of
property,
plant and
equipment,
impairments,
and loss on
disposal of
business
Adjusted 94.4 90.2
EBITDA
Adjusted 24.8% 24.4%
EBITDA
Margin
Adjusted operating cash flow
Half year to 30 June Half year to 30 June
2026 2025
£m £m
Adjusted 94.4 90.2
EBITDA
Less:
Net capital (33.5) (38.0)
expenditure
Principal (6.9) (6.8)
elements of
lease
payments
Provisions 0.2 (0.1)
movement
Working (12.6) (7.6)
capital
movement
Adjusted 41.6 37.7
operating
cash flow
Free cash flow
Half year to 30 June Half year to 30 June
2026 2025
£m £m
Adjusted operating cash flow 41.6 37.7
Less:
Restructuring cash flows (9.5) (7.0)
Net income taxes paid (13.6) (8.7)
Net interest paid (4.0) (4.0)
Free cash flow 14.5 18.0
Adjusted operating cash conversion
Half year to 30 June Half year to 30 June
2026 2025
£m £m
Adjusted 41.6 37.7
operating
cash flow
Adjusted 61.0 55.1
operating
profit
Adjusted 68.2% 68.4%
operating
cash
conversion
Free cash flow conversion
Half year to 30 June Half year to 30 June
2026 2025
£m £m
Free cash flow 14.5 18.0
Adjusted operating profit 61.0 55.1
Free cash flow conversion 23.8% 32.7%
Adjusted tax charge
Half year to 30 June Half year to 30 June
2026 2025
£m £m
Tax charge 10.0 8.6
Tax on 1.2 1.2
amortisation
of acquired
intangibles
Tax on 2.1 2.4
exceptional
items
Adjusted tax 13.3 12.2
charge
Adjusted tax rate
Half year to 30 June Half year to 30 June
2026 2025
£m £m
Adjusted 13.3 12.2
tax
charge
Adjusted 56.6 50.5
profit
before
taxation
Adjusted 23.5% 24.2%
tax rate
Adjusted earnings and adjusted earnings per share
A detailed reconciliation is provided in note 4 of the condensed consolidated
interim financial statements.
Net debt excluding lease liabilities
Half year to 30 June Full year to 31 December
2026 2025
£m £m
Cash and 23.2 25.2
bank
balances
Bank (2.5) (0.8)
overdrafts
(included
in
borrowings)
Bank loans (155.9) (129.2)
(included
in
borrowings)
Net debt (135.2) (104.8)
excluding
lease
liabilities
Lease (55.7) (60.8)
liabilities
Net debt (190.9) (165.6)
A reconciliation of movements in net debt excluding lease liabilities to Free
Cash Flow is included in the Financial Review of this press release.
This information was brought to you by Cision http://news.cision.com