Interim Results for the six months to 30 June 2024

About this update from Bodycote Plc

[{"type":"text","content":"\n \n \n   \n Bodycote plc \n Interim Results for the six months to 30 June 2024 \n \"Good performance in a mixed end market environment\" \n   \n \n \n \n \n Financial summary \n \n \n Half year to \n \n \n   \n \n \n Half year to \n \n \n \n \n \n Organic \n \n \n \n \n \n Growth \n \n \n \n \n \n \n \n 30 June 2024 \n \n \n   \n \n \n 30 June 2023 \n \n \n \n \n \n Growth 3 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revenue \n \n \n £399.0m \n \n \n   \n \n \n £420.1m \n \n \n \n \n \n -3.2% \n \n \n \n \n \n -5.0% \n \n \n \n \n Revenue excluding surcharges 1 \n \n \n £379.2m \n \n \n   \n \n \n £380.7m \n \n \n \n \n \n +1.5% \n \n \n \n \n \n -0.4% \n \n \n \n \n Headline operating profit 1 \n \n \n £66.8m \n \n \n   \n \n \n £62.8m \n \n \n \n \n \n +7.0% \n \n \n \n \n \n +6.4% \n \n \n \n \n Headline operating margin 1 \n \n \n 16.7% \n \n \n   \n \n \n 15.0% \n \n \n \n \n \n \n \n \n \n \n \n +170 bps \n \n \n \n \n Headline operating cash flow 1,4 \n \n \n £49.2m \n \n \n   \n \n \n £48.8m \n \n \n \n \n \n \n \n \n \n \n \n +0.8% \n \n \n \n \n Free cash flow 1,4 \n \n \n £26.0m \n \n \n   \n \n \n £42.9m \n \n \n \n \n \n \n \n \n \n \n \n -39.4% \n \n \n \n \n Basic headline earnings per share 1,2 \n \n \n 25.0p \n \n \n   \n \n \n 23.8p \n \n \n \n \n \n \n \n \n \n \n \n +5.0% \n \n \n \n \n Interim dividend per share \n \n \n 6.9p \n \n \n   \n \n \n 6.7p \n \n \n \n \n \n \n \n \n \n \n \n +3.0% \n \n \n \n \n   \n \n \n \n \n Statutory measures \n \n \n Half year to \n \n \n   \n \n \n Half year to \n \n \n \n \n \n \n \n 30 June 2024 \n \n \n   \n \n \n 30 June 2023 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Operating profit \n \n \n £30.8m \n \n \n   \n \n \n £58.7m \n \n \n \n \n Operating margin \n \n \n 7.7% \n \n \n   \n \n \n 14.0% \n \n \n \n \n Profit after tax \n \n \n £19.7m \n \n \n   \n \n \n £42.9m \n \n \n \n \n Net cash from operating activities \n \n \n £71.7m \n \n \n   \n \n \n £92.5m \n \n \n \n \n Basic earnings per share \n \n \n 10.2p \n \n \n   \n \n \n 22.2p \n \n \n \n \n \n Highlights \n Financial Performance \n § Organic revenue growth of 1.5% excluding surcharges \n § Revenue down 5.0% to £399.0m, due to lower surcharges as well as foreign exchange headwinds \n § Headline operating profit of £66.8m, 7.0% higher organically \n § Further good improvement in headline operating margin to 16.7% (+170bps) \n § Decision taken to reduce the scope of the ongoing ERP programme, saving future cash costs but resulting in a non-cash exceptional charge of £28.3m \n § Statutory operating profit of £30.8m (H1 2023: £58.7m) after ERP impairment charge \n § Headline operating cash flow broadly stable at £49.2m; free cash flow reflects higher tax payments \n   \n Key Achievements \n § Organic growth delivered, excluding surcharges, despite soft Industrial and Automotive conditions \n § Specialist Technologies outperforming, with organic revenue growth of 7.7% excluding surcharges \n § 14.9% organic growth in Aerospace & Defence, excluding surcharges \n § Significant margin improvement, supported by decisive cost actions and pricing improvements \n § Lake City business, acquired in January 2024, successfully integrated \n § First £30m tranche of £60m buyback completed in July; the next tranche will commence on 30 July \n   \n Outlook \n § No change to outlook provided at FY 2023 results \n § Group well positioned with strong foundations and further opportunities to drive value; work underway to optimise strategy and fine-tune plant footprint \n   \n 1        Headline performance measures and measures excluding surcharges represent the statutory results excluding certain items and are considered alternative performance measures (APMs). A reconciliation to the nearest IFRS equivalent is provided at the end of this 2024 Interim Results report (hereafter \"Report\"). \n 2        An earnings per share reconciliation is provided in no te 5 to the condensed consolidated interim financial statements. \n 3        Organic measures are stated at constant currency and exclude contributions from acquisitions. Further details are provided at the end of this Report. \n 4        The definition of the cash flow APMs have been modified and prior year figures have been restated. Refer to the Financial Review for more information. \n   \n Commenting, Jim Fairbairn, Group Chief Executive, said: \n \" We delivered good overall performance in the first half despite a mixed end market backdrop, with organic topline growth excluding surcharges and strong margin progression. This was underpinned by continued outperformance in Specialist Technologies, as well as margin improvement in our Aerospace, Defence & Energy (ADE) division. In our Automotive and General Industrial (AGI) division, where market conditions have been challenging, we have taken a number of decisive actions to balance costs and capacity with near-term demand. Supported by these actions, our outlook for the full year remains unchanged; we expect to deliver organic revenue growth excluding surcharges and year-over-year margin progression. \n Since joining Bodycote in March and taking over as CEO at the end of May, I have visited a significant number of plants spanning our core geographies, processes and markets. The foundations of the business are strong, with passionate people, a market-leading brand, differentiated services, and a unique carbon proposition for our customers. The business is well placed to build on these foundations, and I am excited by the considerable opportunities I see to unlock further value. These include fine-tuning our plant footprint, driving further improvements in operational excellence, optimising our strategy, and simplifying our reporting structure. I look forward to sharing more detail around these plans in due course.\" \n   \n   \n END \n   \n Interim Results Presentation \n Bodycote will host a presentation for investors and analysts at 09.30 am UK BST on 30 July 2024 . The presentation will also be webcast live. Please find connection instructions below: \n   \n Webcast: https://www.bodycote.com/interim2024 \n   \n Conference call details: \n Participant dial-in numbers are: \n United Kingdom local: +44 20 3936 2999 \n United Kingdom (Toll-free): +44 800 358 1035 \n International: +44 20 3936 2999 \n   \n Participant Code:  046203 \n   \n The presentation will be a live webcast. The audiocast and presentation will be available at www.bodycote.com in the investor sec tion on 30 July 2024 after the event. \n   \n For further information, please contact: \n \n \n \n \n   \n \n \n   \n \n \n \n \n Bodycote plc \n Jim Fairbairn, Group Chief Executive \n Ben Fidler, Chief Financial Officer \n Peter Lapthorn, Investor Relations & FP&A \n Tel: +44 1625 505 300 \n \n \n FTI Consulting \n Richard Mountain \n Susanne Yule \n Tel: +44 203 727 1340 \n \n \n \n \n   \n About Bodycote plc \n With more than 165 locations in 23 countries, Bodycote is the world's largest provider of heat treatment and specialist thermal processing services. Through Classical Heat Treatment and Specialist Technologies, including thermal spray coatings, 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 . \n   \n   \n Half Year Commentary \n Overview \n Revenue in H1 was £399.0m, 5.0% lower year-on-year (H1 2023: £420.1m). This reflected a £19.2m reduction in energy surcharges, which were around half the level of H1 2023, as well as a foreign exchange headwind of £12.2m. Excluding surcharges, organic growth was 1.5% (+£5.6m). Our Specialist Technologies continued to outperform their core markets, with organic growth of 7.7% (excluding surcharges) supported by continued customer penetration and market share gains, while revenue from Classical Heat Treatment processes was modestly lower (-1.6%). By end market, there was continued strength in Aerospace & Defence, while conditions were more challenging in Automotive and Industrial Markets. Supported by the more favourable conditions, as well as market share gains, growth was stronger in our ADE division than in AGI. The acquisition of Lake City, which completed in January, added £4.7m of revenue in the period. \n Headline operating profit increased by 6.4% year-on-year to £66.8m (H1 2023: £62.8m). The Group delivered a material increase in headline operating margin, up 170bps to 16.7%. The improvement was led by the ADE division, where margin improved by 520bps to 23.0%. This was driven by higher volumes and improved utilisation, structural price increases in Surface Technology, and improved operational execution in our HIP plants. In our AGI division, margins reduced by 220bps to 16.0%, on lower volumes. We have taken a number of decisive actions to respond to the challenging market conditions in AGI, including headcount reductions, short-term working and reduced shift patterns, together with temporary mothballing of underutilised equipment. These collective actions help to balance capacity with near-term demand levels, while retaining flexibility for growth as market conditions recover. \n Statutory operating profit reduced from £58.7m to £30.8m. This reflected the increase in headline operating profit, offset by acquisition costs for Lake City and the £28.3m exceptional impairment charge arising from the ERP write-down. \n Basic headline earnings per share increased by 5% to 25.0p (H1 2023: 23.8p). Reflecting the reduction in statutory operating profit, basic earnings per share were 10.2p (H1 2023: 22.2p). \n Headline operating cash flow was broadly flat at £49.2m (H1 2023: £48.8m), driven by the increase in headline operating profit, partly offset by a higher level of provision outflows. Free cash flow was lower year-on-year at £26.0m (H1 2023: £42.9m), which reflected a higher level of cash tax compared with the unusually low level paid in the prior year due to a refund received in H1 2023. \n Excluding lease liabilities, the closing net debt position was £68.0m 1 , compared with a net cash position of £12.6m at year end 2023. This reflected the acquisition of Lake City (£54.9m including acquisition costs), the ongoing share buyback programme (H1: £25.8m), and the payment of the 2023 final dividend (£30.1m), partly offset by the cash generation delivered in the period. Leverage remains low with net debt / headline EBITDA of 0.7x. \n   \n 1 Net debt/cash is considered an alternative performance measures (APM). A reconciliation to the nearest IFRS equivalent is provided at the end of this Report. \n   \n Revenue by end market and by process \n   \n \n \n \n \n Revenue by end market \n   \n \n \n Half year to \n 30 June 2024 \n   \n \n \n Half year to \n 30 June 2023 \n   \n \n \n Organic growth, ex. surcharges \n   \n   \n \n \n Growth \n   \n \n \n \n \n    Aerospace & Defence \n \n \n £115.7m \n \n \n £105.3m \n \n \n +14.9% \n \n \n +9.9% \n \n \n \n \n    Automotive \n \n \n £94.4m \n \n \n £104.7m \n \n \n -1.1% \n \n \n -9.8% \n \n \n \n \n    General Industrial \n \n \n £188.9m \n \n \n £210.1m \n \n \n -4.1% \n \n \n -10.1% \n \n \n \n \n       Of which: Industrial Markets \n \n \n £105.8m \n \n \n £125.5m \n \n \n -7.3% \n \n \n -15.7% \n \n \n \n \n       Of which: Energy \n \n \n £42.6m \n \n \n £40.8m \n \n \n +10.4% \n \n \n +4.4% \n \n \n \n \n       Of which: Consumer, Medical & Other \n \n \n £40.5m \n \n \n £43.8m \n \n \n -8.9% \n \n \n -7.5% \n \n \n \n \n Total Group \n \n \n £399.0m \n \n \n £420.1m \n \n \n +1.5% \n \n \n -5.0% \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revenue by process \n   \n \n \n Half year to \n 30 June 2024 \n   \n \n \n Half year to \n 30 June 2023 \n   \n \n \n Organic growth, ex. surcharges \n   \n \n \n Growth \n   \n \n \n \n \n    Specialist Technologies \n \n \n £139.1m \n \n \n £130.4m \n \n \n +7.7% \n \n \n +6.7% \n \n \n \n \n    Classical Heat Treatment \n \n \n £259.9m \n \n \n £289.7m \n \n \n -1.6% \n \n \n -10.3% \n \n \n \n \n Total Group \n \n \n £399.0m \n \n \n £420.1m \n \n \n +1.5% \n \n \n -5.0% \n \n \n \n \n   \n The following commentary reflects organic growth rates excluding surcharges, versus the comparable period last year, unless stated otherwise. \n Aerospace & Defence delivered very strong growth in the first half, up 14.9%. This included good performance in both Commercial Aerospace (+14.0%) and in Defence (+17.6%). In Commercial Aerospace, the medium and longer term demand outlook remains strong, with significant build rate increases planned at both Airbus and Boeing - supported by large order backlogs - as well as continued growth expected in aftermarket activity. Industry supply chain challenges are the key factor determining the pace of near-term growth, with certain aircraft and engine OEMs reducing the delivery growth rates for 2024. We saw little impact from these issues in the first half, but would anticipate some moderation in growth rates during the second half. Defence demand remains high, reflecting global geopolitical tensions, with strong revenue growth achieved in both Europe and the US during the first half. \n Automotive revenue declined by 1.1% in the first half. This reflected a strong prior year comparator, as well as the weak global automotive production environment. The market weakness was most notable in Western Europe, our largest market, where light vehicle production declined by 8% (S&P Global Mobility). In North America, alongside a fairly muted production environment, we were impacted by the reduction in certain end-of-life transmission programmes. The performance in Western Europe and North America was offset by growth in Emerging Markets, including China where we have made further progress on increasing our penetration with Chinese OEMs. Uncertainty has increased around the pace of global transition from internal combustion engines (ICE) to electric vehicles (EV), with a reduction in the rate of EV adoption in the near-term. Our automotive business is well positioned to handle this uncertainty, with exposure across hybrid, ICE, and EV vehicle platforms, including a sizable portion of revenues which are powertrain agnostic. \n General Industrial revenue was 4.1% lower. This was driven by softness in Industrial Markets, where our revenue was down 7.3%, reflecting the weak level of industrial demand in the first half, particularly in Europe, together with a strong prior year comparator. The weakness in Industrial Markets was partly offset by strong growth in Energy, up 10.4%, supported by the market share gains in our Surface Technology business and a healthy demand backdrop. Consumer, Medical & Other revenue was broadly stable, including the benefit of the Lake City acquisition, and 8.9% lower on an organic basis. This reflected soft demand in Consumer and temporary headwinds in Medical, including de-stocking and equipment downtime at a large customer. The fundamental demand trends in the Medical market remain good. \n Specialist Technologies & Classical Heat Treatment \n Specialist Technologies continued to outperform in the first half of 2024, with 7.7% growth. All our Specialist Technologies markets are differentiated, early-stage processes with high margins, large market opportunities and good growth prospects, where Bodycote is either the clear leader or one of the top players among few competitors. The above-market growth in the first half reflected a continued increase in customer penetration, with notable market share gains in Surface Technology in Energy, and strong growth in Aerospace & Defence. The acquisition of the Lake City business, which primarily provides HIP services to the medical orthopaedic market in the US, was completed in January and has been successfully integrated. We continue to invest in Specialist Technologies, including expansion of HIP capacity in multiple US locations, as well as further expansion of our S 3 P capacity in Europe. Classical Heat Treatment revenue was modestly lower year-on-year (-1.6%), primarily reflecting the challenging conditions in Automotive and Industrial. \n Divisional performance \n Bodycote operates in more than 165 locations internationally. It has two customer-focused businesses: the ADE division and the AGI division. The ADE division focuses primarily on Aerospace, Defence and Energy customers, who typically operate globally. The AGI division focuses primarily on Automotive and General Industrial customers. These include multinational companies as well as small to medium size businesses who typically operate with a regional focus and local orientation. \n   \n \n \n \n \n Aerospace, Defence & Energy (ADE) \n   \n   \n \n \n Half year to \n 30 June 2024 \n   \n \n \n Half year to \n 30 June 2023 \n   \n \n \n Organic \n Growth \n   \n \n \n Growth \n   \n \n \n \n \n Revenue \n \n \n 187.5 \n \n \n 180.5 \n \n \n +3.3% \n \n \n +3.9% \n \n \n \n \n Revenue excluding surcharges \n \n \n 179.6 \n \n \n 167.3 \n \n \n +6.6% \n \n \n +7.4% \n \n \n \n \n Headline operating profit \n \n \n 43.2 \n \n \n 32.2 \n \n \n +30.4% \n \n \n +34.2% \n \n \n \n \n Headline operating margin \n \n \n 23.0% \n \n \n 17.8% \n \n \n \n \n \n +520bps \n \n \n \n \n Headline operating margin excluding surcharges \n \n \n 24.1% \n \n \n 19.2% \n \n \n \n \n \n +490bps \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n   \n   \n   \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Automotive & General Industrial (AGI) \n   \n   \n \n \n Half year to \n 30 June 2024 \n   \n \n \n Half year to \n 30 June 2023 \n   \n \n \n Organic \n Growth \n   \n \n \n Growth \n   \n \n \n \n \n Revenue \n \n \n 211.5 \n \n \n 239.6 \n \n \n -8.2% \n \n \n -11.7% \n \n \n \n \n Revenue excluding surcharges \n \n \n 199.6 \n \n \n 213.4 \n \n \n -2.6% \n \n \n -6.5% \n \n \n \n \n Headline operating profit \n \n \n 33.8 \n \n \n 43.7 \n \n \n -18.5% \n \n \n -22.7% \n \n \n \n \n Headline operating margin \n \n \n 16.0% \n \n \n 18.2% \n \n \n \n \n \n -220bps \n \n \n \n \n Headline operating margin excluding surcharges \n \n \n 16.9% \n \n \n 20.5% \n \n \n \n \n \n -360bps \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n   \n During the first half, a number of near-term actions were undertaken to enhance performance. \n In our ADE division, revenue excluding surcharges increased organically by 6.6% in the first half. Our focus has been on driving margin improvement and capitalising on the growing demand environment. This includes increasing utilisation and efficiency, improving operational execution in our HIP business, and structural pricing improvements delivered in our North American Surface Technology business. Headcount in ADE at the end of H1 2024 was broadly flat versus prior year, despite the strong organic growth in revenue excluding surcharges. Supported by these actions, headline operating margins improved by 520bps to 23.0%, returning closer to the levels seen prior to COVID-19. \n In AGI, market conditions have been challenging in the first half, reflected in the 2.6% organic reduction in revenue excluding surcharges. Decisive actions have been taken to balance short-term capacity with the current level of demand. This includes headcount reductions, with overall headcount 5% lower year-on-year (including a reduction of close to 20% in temporary labour), the use of short-term working and reduced shift patterns, and temporary mothballing of under-utilised equipment. At the same time, we have increased the level of sales resource and put a focused sales strategy in place to drive increased market share. \n Sustainability \n Our services deliver a wide range of sustainability benefits, including reducing customers' carbon emissions, extending the lifespan of components, supporting the development of low-carbon industries, and enabling lighter and thinner components to be adopted. We continue to place significant focus on driving growth through this unique carbon reduction proposition. In the first half, this included winning a major new multi-year contract with a global tier one automotive supplier to use state-of-the-art low pressure carburising technology (LPC) to treat components for electronic braking systems. LPC technology cuts processing time by around 20% and energy by around 50% compared with traditional atmospheric carburising, as well as delivering a c.99% reduction in process gas usage. \n As well as supporting our customers, we continue to focus on reducing our own carbon footprint with a number of actions being taken to improve energy efficiency and reduce emissions. In the first half, we delivered a further reduction in Group Scope 1 and Scope 2 carbon emissions of 7%. As well as lowering emissions, these actions help to reduce our cost base and drive margin improvement. \n Update on ERP programme \n The Group has been developing a new enterprise-wide ERP solution, based on SAP. Good progress has been made on the implementation and roll-out of SAP for Finance & Procurement, which is expected to complete in early 2026. \n For the Operations module, which is a larger element of the ERP programme, after a detailed evaluation the decision has been reached to cease further investment. Evidenced by the progression of the pilot phase of the programme in H1 2024, the Operations module would have added excess complexity and overhead cost, with the risk of operational disruption during the roll-out phase due to the nature of our multi-plant footprint across 165 locations. As a result, we will refocus our efforts on enhancing and extending the life of our existing ERP systems for Operations. This decision will reduce risk and future implementation costs, but has resulted in an impairment charge of £28.3m which has been taken as an exceptional item in the first half results. \n Summary and outlook \n We delivered good overall performance in the first half despite a mixed end market backdrop, with organic topline growth excluding surcharges and strong margin progression. This was underpinned by continued outperformance in Specialist Technologies, as well as margin improvement in our ADE division. In our AGI division, where market conditions have been challenging, we have taken a number of decisive actions to balance costs and capacity with near-term demand. Supported by these actions, our outlook for the full year remains unchanged; we expect to deliver organic revenue growth excluding surcharges and year-over-year margin progression. \n   \n   \n Financial Review \n   \n References to organic growth in the following Review reflect growth at constant currency FX rates excluding the impact of acquisitions and disposals. Further detail is provided at the end of this Report. \n \n \n \n \n \n \n \n Half year to \n \n \n Half year to \n \n \n \n \n \n \n \n 30 June 2024 \n \n \n 30 June 2023 \n \n \n \n \n   \n \n \n £m \n \n \n £m \n \n \n \n \n Revenue \n \n \n 399.0 \n \n \n 420.1 \n \n \n \n \n Headline operating profit \n \n \n 66.8 \n \n \n 62.8 \n \n \n \n \n Amortisation of acquired intangible assets \n \n \n (5.3) \n \n \n (4.1) \n \n \n \n \n Acquisition costs \n \n \n (2.4) \n \n \n - \n \n \n \n \n Exceptional items \n \n \n (28.3) \n \n \n - \n \n \n \n \n Operating profit \n \n \n 30.8 \n \n \n 58.7 \n \n \n \n \n Net finance charge \n \n \n (4.6) \n \n \n (3.5) \n \n \n \n \n Profit before taxation \n \n \n 26.2 \n \n \n 55.2 \n \n \n \n \n Taxation charge \n \n \n (6.5) \n \n \n (12.3) \n \n \n \n \n Profit for the period \n \n \n 19.7 \n \n \n 42.9 \n \n \n \n \n   \n Group revenue in the first half of 2024 was £399.0m (H1 2023: £420.1m), a decline of 5.0% at actual exchange rates. Reflecting the reduction in energy input costs, energy surcharges declined materially in the first half to £19.8m (H1 2023: £39.4m). Organic revenue growth, excluding surcharges, was 1.5% in the first half. \n   \n Headline operating profit for the six months increased by 6.4% to £ 66.8 m (H1 2023: £62.8m) and was up 7.0% organically.  Headline operating margin rose by 170bps to 16.7% (H1 2023: 15.0%) reflecting strong performance in the ADE division, including higher utilisation, improved operational execution in our HIP plants, and pricing improvements in Surface Technology. \n   \n Statutory operating profit declined to £30.8m (H1 2023: £58.7m) reflecting the increase in headline operating profit, offset by a higher charge for the amortisation of acquired intangibles, the costs relating to the Lake City acquisition completed in January 2024, and an impairment charge of £28.3m relating to our ERP programme. \n   \n Exceptional items \n As discussed in more detail above, the Group completed an assessment of the development of its ERP software solution which resulted in the decision to cease development of the operational module. Accordingly, an exceptional impairment charge of £28.3m has been taken in the first half. \n   \n Finance charge \n The net finance charge increased modestly to £4.6m (H1 2023: £3.5m). An analysis of the finance charge is set out in the table below: \n   \n \n \n \n \n \n \n \n Half year to \n \n \n Half year to \n \n \n \n \n \n \n \n 30 June 2024 \n \n \n 30 June 2023 \n \n \n \n \n   \n \n \n £m \n \n \n £m \n \n \n \n \n Interest on loans and bank overdrafts \n \n \n (1.7) \n \n \n (1.5) \n \n \n \n \n Lease and other interest charges \n \n \n (2.1) \n \n \n (1.4) \n \n \n \n \n Finance and bank charges \n \n \n (1.2) \n \n \n (1.1) \n \n \n \n \n Total finance charges \n \n \n (5.0) \n \n \n (4.0) \n \n \n \n \n Interest received \n \n \n 0.4 \n \n \n 0.5 \n \n \n \n \n Net finance charge \n \n \n (4.6) \n \n \n (3.5) \n \n \n \n \n   \n The increased interest charges during the period were driven by an increase in the charge on lease liabilities and marginally higher interest charges on higher borrowings. \n   \n The Group's £250.9m Revolving Credit Facility which expires in May 2027 was drawn by £89.0m as at 30 June 2024 (31 December 2023: £32.1m) leaving facility headroom of £161.9m (31 December 2023: £218.8m). The Group also has access to an additional undrawn committed facility of £9.4m bringing total committed facility headroom to £171.3m at 30 June 2024 (31 December 2023: £228.3m). \n   \n Taxation \n The headline tax charge was £14.6m (H1 2023: £13.4m). The headline tax rate, being stated before accounting for amortisation of acquired intangibles, acquisition costs and exceptional items, was 23.5% (H1 2023: 22.5%). \n   \n Reflecting the lower statutory profit, the statutory tax charge in the first half of 2024 reduced to £6.5m compared with a tax charge of £12.3m for the same period in 2023. The effective statutory tax rate was 24.8% (H1 2023: 22.3%). \n   \n Earnings per share \n Basic headline earnings per share for the half year of 25.0p (H1 2023: 23.8p) was up 5.0% reflecting the increase in headline operating profit. Basic earnings per share on a statutory basis was 10.2p (H1 2023: 22.2p). Fully diluted earnings were not materially different from basic earnings in either year. \n   \n Management cash flow \n \n \n \n \n \n \n \n Half year to \n \n \n Half year to \n \n \n Year ended \n \n \n \n \n \n \n \n 30 June 2024 \n \n \n 30 June 2023 1 \n \n \n 31 Dec 2023 1 \n \n \n \n \n \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n Headline operating profit \n \n \n 66.8 \n \n \n 62.8 \n \n \n 127.6 \n \n \n \n \n Depreciation and amortisation \n \n \n 37.7 \n \n \n 37.2 \n \n \n 74.0 \n \n \n \n \n Other, including impairment and profit on disposal of property, plant and equipment \n \n \n 0.1 \n \n \n (1.0) \n \n \n (2.7) \n \n \n \n \n Headline EBITDA \n \n \n 104.6 \n \n \n 99.0 \n \n \n 198.9 \n \n \n \n \n Net maintenance capital expenditure \n \n \n (27.1) \n \n \n (24.7) \n \n \n (47.1) \n \n \n \n \n Expansionary capital expenditure \n \n \n (7.5) \n \n \n (10.4) \n \n \n (24.9) \n \n \n \n \n Principal element of lease payments \n \n \n (6.7) \n \n \n (6.6) \n \n \n (13.0) \n \n \n \n \n Provisions movement \n \n \n (6.4) \n \n \n 0.7 \n \n \n (0.9) \n \n \n \n \n Working capital movement \n \n \n (7.7) \n \n \n (9.2) \n \n \n (0.8) \n \n \n \n \n Headline operating cash flow \n \n \n 49.2 \n \n \n 48.8 \n \n \n 112.2 \n \n \n \n \n Restructuring \n \n \n (0.4) \n \n \n (1.0) \n \n \n (1.6) \n \n \n \n \n Net Finance costs \n \n \n (3.8) \n \n \n (3.3) \n \n \n (6.4) \n \n \n \n \n Net Tax \n \n \n (19.0) \n \n \n (1.6) \n \n \n (9.0) \n \n \n \n \n Free cash flow \n \n \n 26.0 \n \n \n 42.9 \n \n \n 95.2 \n \n \n \n \n Net lease liability additions and disposals \n \n \n (2.0) \n \n \n 0.9 \n \n \n (0.5) \n \n \n \n \n Ordinary dividend \n \n \n (30.1) \n \n \n (28.5) \n \n \n (40.6) \n \n \n \n \n Acquisition spend \n \n \n (54.9) \n \n \n - \n \n \n (0.1) \n \n \n \n \n Ordinary shares purchased for share buyback programme \n \n \n (25.8) \n \n \n - \n \n \n - \n \n \n \n \n Own shares purchased less share based payments \n \n \n 3.6 \n \n \n (7.9) \n \n \n (8.1) \n \n \n \n \n (Increase)/decrease in net debt \n \n \n (83.2) \n \n \n 7.4 \n \n \n 45.9 \n \n \n \n \n Opening net debt \n \n \n (51.7) \n \n \n (99.4) \n \n \n (99.4) \n \n \n \n \n Foreign exchange movements \n \n \n 1.6 \n \n \n 3.2 \n \n \n 1.8 \n \n \n \n \n Closing net debt \n \n \n (133.3) \n \n \n (88.8) \n \n \n (51.7) \n \n \n \n \n Lease liabilities \n \n \n 65.3 \n \n \n 62.2 \n \n \n 64.3 \n \n \n \n \n Net (debt)/cash excluding lease liabilities \n \n \n (68.0) \n \n \n (26.6) \n \n \n 12.6 \n \n \n \n \n   \n 1   The Group has amended the presentation of its management cash flow and consequently has redefined both headline operating cash flow and free cash flow to: \n ·     Include outflows for expansionary capital expenditure, which were previously reported below free cash flow \n ·     Remove the effect of changes in net debt caused by non-cash lease liability asset additions and disposals; and \n ·     Include the principal cash repayments of lease liabilities. \n The Group believes that these changes provide improved clarity over cash flow movements and better align the Group with normal market practice. The comparative figures have been adjusted to reflect these changes. Please refer to the alternative performance measures (APMs) section at the end of this Report for further information. \n   \n Headline operating cash flow rose modestly to £49.2m (H1 2023: £48.8m), with increased profit partially offset by higher provision outflows and a slightly lower level of capital expenditure in 2024 reflecting the phasing of spend. The Group continues to focus on working capital control and receivables collection. The statutory measure, net cash from operating activities, was £71.7m (H1 2023: £92.5m). \n   \n Free cash flow in the period reduced to £26.0m (H1 2023: £42.9m) mainly as a result of higher net tax payments of £19.0m versus the unusually low level of £1.6m in the first half of 2023, which had benefitted from the receipt of prior year's tax refunds. \n Net debt, excluding lease liabilities rose by £80.6m to £68.0m at 30 June 2024 after paying £30.1m of dividends to shareholders, £54.9m spend for the acquisition of Lake City (comprising £52.2m consideration and £2.7m acquisition costs) and £25.8m for the repurchase of 3.7m shares as part of the ongoing share buyback programme announced in January. \n   \n Acquisition \n Following the completion of the £52.2m acquisition of Lake City in January 2024, the Group has recognised £43.7m of intangible assets comprising acquired intangible assets of £39.8m and £3.9m of residual goodwill. More details are provided in note 7 to the condensed consolidated interim financial statements. \n   \n Principal risks and uncertainties \n The Group has processes in place to identify, evaluate and mitigate the principal risks that could have an impact on the Group's performance. The Directors have reviewed the principal risks and uncertainties of the Group and consider that the principal risks and uncertainties of the Group published in the Annual Report for the year ended 31 December 2023 remain appropriate. Further details of these principal risks and associated risk management processes, including financial risks, can be found on pages 28-32 and 129-131 of the 2023 Annual Report, which is available at www.bodycote.com . \n   \n The principal risks referred to and which could have a material impact on the Group's performance for the remainder of the current financial year relate to: \n \n \n \n \n ·      Markets; \n \n \n ·      Loss of key accreditations; \n \n \n \n \n ·      Competitor action; \n \n \n ·      Major disruption at a facility; \n \n \n \n \n ·      Safety and health \n \n \n ·      Machine downtime; \n \n \n \n \n ·      Climate change; \n \n \n ·      Information technology and cybersecurity; and \n \n \n \n \n ·      Service quality; \n \n \n ·      Regulatory and legislative compliance. \n \n \n \n \n ·      Contract review; \n \n \n \n \n \n \n \n   \n Going concern \n 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 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. \n   \n For this reason, the Directors continue to adopt the going concern basis in preparing the condensed consolidated interim financial statements. \n   \n Responsibility statement \n We confirm to the best of our knowledge that: \n (a)   the condensed consolidated set of interim financial statements has been prepared in accordance with UK adopted IAS 34 Interim Financial Reporting; \n (b)   the 2024 Interim Results includes 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 \n (c)   the 2024 Interim Results include a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein). \n   \n \n \n \n \n By order of the Board, \n \n \n \n \n \n \n \n J. Fairbairn \n \n \n B. Fidler \n \n \n \n \n Group Chief Executive \n \n \n Chief Financial Officer \n \n \n \n \n 30 July 2024 \n \n \n 30 July 2024 \n \n \n \n \n   \n Cautionary statement \n These 2024 Interim Results have been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The 2024 Interim Results should not be relied on by any other party or for any other purpose. \n   \n These 2024 Interim Results contain certain forward-looking statements. These statements are made by the Directors in good faith based 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 economic and business risk factors, underlying any such forward-looking information. \n   \n   \n Independent review report to Bodycote plc \n Report on the condensed consolidated interim financial statements \n Our conclusion \n We have reviewed Bodycote plc's condensed consolidated interim financial statements (the \"interim financial statements\") in the 2024 Interim Results of Bodycote plc for the 6 month period ended 30 June 2024 (the \"period\"). \n 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. \n The interim financial statements comprise: \n ·     the unaudited condensed consolidated interim balance sheet as at 30 June 2024; \n ·     the unaudited condensed consolidated interim income statement and the unaudited condensed consolidated interim statement of comprehensive income for the period then ended; \n ·     the unaudited condensed consolidated interim cash flow statement for the period then ended; \n ·     the unaudited condensed consolidated interim statement of changes in equity for the period then ended; and \n ·     the explanatory notes to the interim financial statements. \n The interim financial statements included in the 2024 Interim 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. \n Basis for conclusion \n 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. \n 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. \n We have read the other information contained in the 2024 Interim Results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements. \n Conclusions relating to going concern \n 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. \n Responsibilities for the interim financial statements and the review \n Our responsibilities and those of the directors \n The 2024 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 2024 Interim Results in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. In preparing the 2024 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. \n Our responsibility is to express a conclusion on the interim financial statements in the 2024 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. 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. \n   \n PricewaterhouseCoopers LLP \n Chartered Accountants \n London \n 30 July 2024 \n   \n   \n Unaudited condensed consolidated interim income statement \n   \n \n \n \n \n Year ended \n \n \n   \n \n \n \n \n \n Half year to \n \n \n Half year to \n \n \n \n \n 31 Dec 2023 \n \n \n   \n \n \n \n \n \n 30 June 2024 \n \n \n 30 June 2023 \n \n \n \n \n (audited) \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n £m \n \n \n   \n \n \n Note \n \n \n £m \n \n \n £m \n \n \n \n \n 802.5 \n \n \n Revenue \n \n \n 1 \n \n \n 399.0 \n \n \n 420.1 \n \n \n \n \n (694.4) \n \n \n Cost of sales and overheads \n \n \n   \n \n \n (341.4) \n \n \n (367.5) \n \n \n \n \n 12.6 \n \n \n Other operating income excluding exceptional items \n \n \n   \n \n \n 2.1 \n \n \n 6.5 \n \n \n \n \n (1.3) \n \n \n Other operating expenses excluding exceptional items \n \n \n   \n \n \n (0.5) \n \n \n (0.2) \n \n \n \n \n (0.2) \n \n \n Net impairment losses on financial assets \n \n \n \n \n \n (0.1) \n \n \n (0.2) \n \n \n \n \n 119.2 \n \n \n Operating profit prior to exceptional items \n \n \n 1 \n \n \n 59.1 \n \n \n 58.7 \n \n \n \n \n - \n \n \n Exceptional items \n \n \n 2 \n \n \n (28.3) \n \n \n - \n \n \n \n \n 119.2 \n \n \n Operating profit \n \n \n   \n \n \n 30.8 \n \n \n 58.7 \n \n \n \n \n 0.8 \n \n \n Finance income \n \n \n   \n \n \n 0.4 \n \n \n 0.5 \n \n \n \n \n (8.3) \n \n \n Finance charge \n \n \n   \n \n \n (5.0) \n \n \n (4.0) \n \n \n \n \n 111.7 \n \n \n Profit before taxation \n \n \n   \n \n \n 26.2 \n \n \n 55.2 \n \n \n \n \n (24.9) \n \n \n Taxation charge \n \n \n 3 \n \n \n (6.5) \n \n \n (12.3) \n \n \n \n \n 86.8 \n \n \n Profit for the period \n \n \n   \n \n \n 19.7 \n \n \n 42.9 \n \n \n \n \n   \n \n \n Attributable to: \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n 85.6 \n \n \n Equity holders of the parent \n \n \n   \n \n \n 19.3 \n \n \n 42.3 \n \n \n \n \n 1.2 \n \n \n Non-controlling interests \n \n \n   \n \n \n 0.4 \n \n \n 0.6 \n \n \n \n \n 86.8 \n \n \n   \n \n \n   \n \n \n 19.7 \n \n \n 42.9 \n \n \n \n \n   \n \n \n Earnings per share \n \n \n 5 \n \n \n   \n \n \n   \n \n \n \n \n Pence \n \n \n   \n \n \n \n \n \n Pence \n \n \n Pence \n \n \n \n \n 45.1 \n \n \n Basic \n \n \n   \n \n \n 10.2 \n \n \n 22.2 \n \n \n \n \n 44.8 \n \n \n Diluted \n \n \n   \n \n \n 10.2 \n \n \n 22.1 \n \n \n \n \n   \n Unaudited condensed consolidated interim statement of comprehensive income \n   \n \n \n \n \n Year ended \n \n \n   \n \n \n \n \n \n Half year to \n \n \n Half year to \n \n \n \n \n 31 Dec 2023 \n \n \n   \n \n \n \n \n \n 30 June 2024 \n \n \n 30 June 2023 \n \n \n \n \n (audited) \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n £m \n \n \n   \n \n \n \n \n \n £m \n \n \n £m \n \n \n \n \n 86.8 \n \n \n Profit for the period \n \n \n   \n \n \n 19.7 \n \n \n 42.9 \n \n \n \n \n   \n \n \n Items that will not be reclassified to profit or loss: \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n (0.1) \n \n \n Actuarial (losses)/gains on defined benefit pension schemes \n \n \n \n \n \n - \n \n \n 0.1 \n \n \n \n \n (0.1) \n \n \n Total items that will not be reclassified to profit or loss \n \n \n   \n \n \n - \n \n \n 0.1 \n \n \n \n \n   \n \n \n Items that may be reclassified subsequently to profit or loss: \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n (29.7) \n \n \n Exchange losses on translation of overseas operations \n \n \n \n \n \n (8.6) \n \n \n (34.9) \n \n \n \n \n 1.5 \n \n \n Movements on hedges of net investments \n \n \n   \n \n \n 1.6 \n \n \n 1.9 \n \n \n \n \n 0.4 \n \n \n Movements on cash flow hedges \n \n \n   \n \n \n (0.1) \n \n \n 0.3 \n \n \n \n \n (27.8) \n \n \n Total items that may be reclassified subsequently to profit or loss \n \n \n   \n \n \n (7.1) \n \n \n (32.7) \n \n \n \n \n (27.9) \n \n \n Other comprehensive expense for the period \n \n \n   \n \n \n (7.1) \n \n \n (32.6) \n \n \n \n \n 58.9 \n \n \n Total comprehensive income for the period \n \n \n   \n \n \n 12.6 \n \n \n 10.3 \n \n \n \n \n   \n \n \n Attributable to: \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n 58.5 \n \n \n Equity holders of the parent \n \n \n   \n \n \n 12.4 \n \n \n 10.2 \n \n \n \n \n 0.4 \n \n \n Non-controlling interests \n \n \n   \n \n \n 0.2 \n \n \n 0.1 \n \n \n \n \n 58.9 \n \n \n   \n \n \n   \n \n \n 12.6 \n \n \n 10.3 \n \n \n \n \n   \n   \n   \n Unaudited condensed consolidated interim balance sheet \n   \n \n \n \n \n As at \n \n \n   \n \n \n \n \n \n As at \n \n \n As at \n \n \n \n \n 31 Dec 2023 \n \n \n   \n \n \n \n \n \n 30 June 2024 \n \n \n 30 June 2023 \n \n \n \n \n (audited) \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n £m \n \n \n   \n \n \n Note \n \n \n £m \n \n \n £m \n \n \n \n \n   \n \n \n Non-current assets \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n 221.5 \n \n \n Goodwill \n \n \n 6 \n \n \n 225.1 \n \n \n 220.9 \n \n \n \n \n 111.2 \n \n \n Other intangible assets \n \n \n   \n \n \n 120.1 \n \n \n 111.5 \n \n \n \n \n 504.9 \n \n \n Property, plant and equipment \n \n \n   \n \n \n 503.0 \n \n \n 495.0 \n \n \n \n \n 58.5 \n \n \n Right-of-use assets \n \n \n   \n \n \n 59.3 \n \n \n 56.6 \n \n \n \n \n 2.6 \n \n \n Deferred tax assets \n \n \n   \n \n \n 7.1 \n \n \n 2.0 \n \n \n \n \n 1.3 \n \n \n Trade and other receivables \n \n \n   \n \n \n 1.6 \n \n \n 1.2 \n \n \n \n \n 900.0 \n \n \n   \n \n \n   \n \n \n 916.2 \n \n \n 887.2 \n \n \n \n \n   \n \n \n Current assets \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n 29.5 \n \n \n Inventories \n \n \n   \n \n \n 29.7 \n \n \n 28.4 \n \n \n \n \n 13.1 \n \n \n Current tax assets \n \n \n   \n \n \n 6.5 \n \n \n 16.2 \n \n \n \n \n 148.4 \n \n \n Trade and other receivables \n \n \n   \n \n \n 163.0 \n \n \n 163.5 \n \n \n \n \n 45.2 \n \n \n Cash and bank balances \n \n \n   \n \n \n 21.7 \n \n \n 25.9 \n \n \n \n \n 0.5 \n \n \n Assets held for sale \n \n \n   \n \n \n 0.5 \n \n \n - \n \n \n \n \n 236.7 \n \n \n   \n \n \n   \n \n \n 221.4 \n \n \n 234.0 \n \n \n \n \n 1,136.7 \n \n \n Total assets \n \n \n   \n \n \n 1,137.6 \n \n \n 1,121.2 \n \n \n \n \n   \n \n \n Current liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n 122.7 \n \n \n Trade and other payables \n \n \n   \n \n \n 131.4 \n \n \n 127.2 \n \n \n \n \n 46.0 \n \n \n Current tax liabilities \n \n \n   \n \n \n 33.1 \n \n \n 46.0 \n \n \n \n \n 32.6 \n \n \n Borrowings \n \n \n   \n \n \n 90.3 \n \n \n 52.5 \n \n \n \n \n 11.8 \n \n \n Lease liabilities \n \n \n   \n \n \n 12.0 \n \n \n 11.7 \n \n \n \n \n 12.0 \n \n \n Provisions \n \n \n   \n \n \n 5.4 \n \n \n 9.6 \n \n \n \n \n 225.1 \n \n \n   \n \n \n   \n \n \n 272.2 \n \n \n 247.0 \n \n \n \n \n 11.6 \n \n \n Net current (liabilities)/assets \n \n \n   \n \n \n (50.8) \n \n \n (13.0) \n \n \n \n \n   \n \n \n Non-current liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n 52.5 \n \n \n Lease liabilities \n \n \n   \n \n \n 53.3 \n \n \n 50.5 \n \n \n \n \n 11.1 \n \n \n Retirement benefit obligations \n \n \n   \n \n \n 10.9 \n \n \n 10.6 \n \n \n \n \n 51.8 \n \n \n Deferred tax liabilities \n \n \n   \n \n \n 49.3 \n \n \n 48.7 \n \n \n \n \n 3.0 \n \n \n Provisions \n \n \n   \n \n \n 2.8 \n \n \n 7.4 \n \n \n \n \n 0.9 \n \n \n Other payables \n \n \n   \n \n \n 0.9 \n \n \n 1.0 \n \n \n \n \n 119.3 \n \n \n   \n \n \n   \n \n \n 117.2 \n \n \n 118.2 \n \n \n \n \n 344.4 \n \n \n Total liabilities 1 \n \n \n   \n \n \n 389.4 \n \n \n 365.2 \n \n \n \n \n 792.3 \n \n \n Net assets \n \n \n   \n \n \n 748.2 \n \n \n 756.0 \n \n \n \n \n   \n \n \n Equity \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n 33.1 \n \n \n Share capital \n \n \n   \n \n \n 32.5 \n \n \n 33.1 \n \n \n \n \n 177.1 \n \n \n Share premium account \n \n \n   \n \n \n 177.1 \n \n \n 177.1 \n \n \n \n \n (15.6) \n \n \n Own shares reserve \n \n \n   \n \n \n (12.4) \n \n \n (14.7) \n \n \n \n \n 129.8 \n \n \n Capital redemption reserve \n \n \n   \n \n \n 130.4 \n \n \n 129.8 \n \n \n \n \n 10.1 \n \n \n Other reserves \n \n \n   \n \n \n 11.7 \n \n \n 9.5 \n \n \n \n \n 52.3 \n \n \n Translation reserves \n \n \n   \n \n \n 43.9 \n \n \n 46.8 \n \n \n \n \n 404.0 \n \n \n Retained earnings \n \n \n   \n \n \n 363.4 \n \n \n 373.2 \n \n \n \n \n 790.8 \n \n \n Equity attributable to equity holders of the parent \n \n \n   \n \n \n 746.6 \n \n \n 754.8 \n \n \n \n \n 1.5 \n \n \n Non-controlling interests \n \n \n   \n \n \n 1.6 \n \n \n 1.2 \n \n \n \n \n 792.3 \n \n \n Total equity \n \n \n   \n \n \n 748.2 \n \n \n 756.0 \n \n \n \n \n   \n 1    The sub-total for total liabilities as at 30 June 2023 has been restated from £375.8m, as previously presented, to £365.2m to correct an isolated casting error. This restatement has no effect on any other amounts as disclosed in the condensed consolidated interim balance sheet or financial statements.  \n   \n   \n Unaudited condensed consolidated interim cash flow statement \n   \n \n \n \n \n   Year ended \n \n \n   \n \n \n \n \n \n Half year to \n \n \n Half year to \n \n \n \n \n 31 Dec 2023 \n \n \n   \n \n \n \n \n \n 30 June 2024 \n \n \n 30 June 2023 \n \n \n \n \n (audited) \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n £m \n \n \n   \n \n \n Note \n \n \n £m \n \n \n £m \n \n \n \n \n 191.6 \n \n \n Net cash from operating activities \n \n \n 10 \n \n \n 71.7 \n \n \n 92.5 \n \n \n \n \n   \n \n \n Investing activities \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n (74.1) \n \n \n Purchases of property, plant and equipment \n \n \n   \n \n \n (31.8) \n \n \n (34.9) \n \n \n \n \n 10.4 \n \n \n Proceeds on disposal of property, plant and equipment, right-of-use and intangible assets \n \n \n   \n \n \n 0.4 \n \n \n 3.9 \n \n \n \n \n (8.3) \n \n \n Purchases of other intangibles assets \n \n \n   \n \n \n (3.3) \n \n \n (4.2) \n \n \n \n \n - \n \n \n Acquisition of businesses net of cash acquired \n \n \n   \n \n \n (52.2) \n \n \n - \n \n \n \n \n - \n \n \n Loans receivable \n \n \n   \n \n \n (0.6) \n \n \n - \n \n \n \n \n 0.8 \n \n \n Interest received \n \n \n   \n \n \n 0.4 \n \n \n 0.5 \n \n \n \n \n (71.2) \n \n \n Net cash used in investing activities \n \n \n   \n \n \n (87.1) \n \n \n (34.7) \n \n \n \n \n   \n \n \n Financing activities \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n (7.2) \n \n \n Interest paid \n \n \n \n \n \n (4.2) \n \n \n (3.7) \n \n \n \n \n (40.6) \n \n \n Dividends paid \n \n \n 4 \n \n \n (30.2) \n \n \n (28.5) \n \n \n \n \n (13.1) \n \n \n Principal element of lease payments \n \n \n   \n \n \n (6.7) \n \n \n (6.7) \n \n \n \n \n 25.7 \n \n \n Drawdown of bank loans \n \n \n   \n \n \n 59.1 \n \n \n 5.2 \n \n \n \n \n (61.8) \n \n \n Repayments of bank loans \n \n \n   \n \n \n (0.6) \n \n \n (20.6) \n \n \n \n \n - \n \n \n Ordinary shares purchased for share buyback \n \n \n   \n \n \n (25.8) \n \n \n - \n \n \n \n \n (13.2) \n \n \n Own shares purchased to be held as treasury shares \n \n \n   \n \n \n - \n \n \n (12.2) \n \n \n \n \n (110.2) \n \n \n Net cash used in financing activities \n \n \n   \n \n \n (8.4) \n \n \n (66.5) \n \n \n \n \n 10.2 \n \n \n Net (decrease)/increase in cash and cash equivalents \n \n \n   \n \n \n (23.8) \n \n \n (8.7) \n \n \n \n \n 36.2 \n \n \n Cash and cash equivalents at beginning of year \n \n \n   \n \n \n 44.7 \n \n \n 36.2 \n \n \n \n \n (1.7) \n \n \n Effect of foreign exchange rate changes \n \n \n   \n \n \n (0.5) \n \n \n (1.7) \n \n \n \n \n 44.7 \n \n \n Cash and cash equivalents at end of the period \n \n \n 10 \n \n \n 20.4 \n \n \n 25.8 \n \n \n \n \n   \n   \n   \n Unaudited condensed consolidated interim statement of changes in equity \n \n \n \n \n \n \n \n Share capital \n \n \n Share premium account \n \n \n Own shares reserve \n \n \n Capital redemption reserve \n \n \n Other reserves \n \n \n Translation reserves \n \n \n Retained earnings \n \n \n Equity attributable to equity holders of the parent \n \n \n Non-controlling interests \n \n \n Total equity \n \n \n \n \n   \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n 1 January 2024 \n \n \n 33.1 \n \n \n 177.1 \n \n \n (15.6) \n \n \n 129.8 \n \n \n 10.1 \n \n \n 52.3 \n \n \n 404.0 \n \n \n 790.8 \n \n \n 1.5 \n \n \n 792.3 \n \n \n \n \n Profit for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 19.3 \n \n \n 19.3 \n \n \n 0.4 \n \n \n 19.7 \n \n \n \n \n Exchange differences on translation of overseas operations \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (8.4) \n \n \n - \n \n \n (8.4) \n \n \n (0.2) \n \n \n (8.6) \n \n \n \n \n Movements on hedges of net investments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1.6 \n \n \n - \n \n \n - \n \n \n 1.6 \n \n \n - \n \n \n 1.6 \n \n \n \n \n Movements on cash flow hedges \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (0.1) \n \n \n - \n \n \n - \n \n \n (0.1) \n \n \n - \n \n \n (0.1) \n \n \n \n \n Total comprehensive income for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1.5 \n \n \n (8.4) \n \n \n 19.3 \n \n \n 12.4 \n \n \n 0.2 \n \n \n 12.6 \n \n \n \n \n Ordinary shares acquired \n \n \n (0.6) \n \n \n - \n \n \n - \n \n \n 0.6 \n \n \n - \n \n \n - \n \n \n (30.2) \n \n \n (30.2) \n \n \n - \n \n \n (30.2) \n \n \n \n \n Settlement of share awards \n \n \n - \n \n \n - \n \n \n 3.2 \n \n \n - \n \n \n (3.5) \n \n \n - \n \n \n 0.3 \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Share-based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 3.6 \n \n \n - \n \n \n - \n \n \n 3.6 \n \n \n - \n \n \n 3.6 \n \n \n \n \n Deferred tax on share-based payment transactions \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 0.1 \n \n \n 0.1 \n \n \n - \n \n \n 0.1 \n \n \n \n \n Dividends \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (30.1) \n \n \n (30.1) \n \n \n (0.1) \n \n \n (30.2) \n \n \n \n \n 30 June 2024 \n \n \n 32.5 \n \n \n 177.1 \n \n \n (12.4) \n \n \n 130.4 \n \n \n 11.7 \n \n \n 43.9 \n \n \n 363.4 \n \n \n 746.6 \n \n \n 1.6 \n \n \n 748.2 \n \n \n \n \n 1 January 2023 \n \n \n 33.1 \n \n \n 177.1 \n \n \n (5.2) \n \n \n 129.8 \n \n \n 5.1 \n \n \n 81.2 \n \n \n 359.8 \n \n \n 780.9 \n \n \n 1.1 \n \n \n 782.0 \n \n \n \n \n Profit for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 42.3 \n \n \n 42.3 \n \n \n 0.6 \n \n \n 42.9 \n \n \n \n \n Exchange differences on translation of overseas operations \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (34.4) \n \n \n - \n \n \n (34.4) \n \n \n (0.5) \n \n \n (34.9) \n \n \n \n \n Movements on hedges of net investments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1.9 \n \n \n - \n \n \n - \n \n \n 1.9 \n \n \n - \n \n \n 1.9 \n \n \n \n \n Movements on cash flow hedges \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 0.3 \n \n \n - \n \n \n - \n \n \n 0.3 \n \n \n - \n \n \n 0.3 \n \n \n \n \n Actuarial gains on defined benefit pension schemes net of deferred tax \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 0.1 \n \n \n 0.1 \n \n \n - \n \n \n 0.1 \n \n \n \n \n Total comprehensive income for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 2.2 \n \n \n (34.4) \n \n \n 42.4 \n \n \n 10.2 \n \n \n 0.1 \n \n \n 10.3 \n \n \n \n \n Share acquired in the year/settlement of share options \n \n \n - \n \n \n - \n \n \n (9.5) \n \n \n - \n \n \n (2.1) \n \n \n - \n \n \n (0.6) \n \n \n (12.2) \n \n \n - \n \n \n (12.2) \n \n \n \n \n Share-based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 4.3 \n \n \n - \n \n \n - \n \n \n 4.3 \n \n \n - \n \n \n 4.3 \n \n \n \n \n Deferred tax on share-based payment transactions \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 0.1 \n \n \n 0.1 \n \n \n - \n \n \n 0.1 \n \n \n \n \n Dividends \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (28.5) \n \n \n (28.5) \n \n \n - \n \n \n (28.5) \n \n \n \n \n 30 June 2023 \n \n \n 33.1 \n \n \n 177.1 \n \n \n (14.7) \n \n \n 129.8 \n \n \n 9.5 \n \n \n 46.8 \n \n \n 373.2 \n \n \n 754.8 \n \n \n 1.2 \n \n \n 756.0 \n \n \n \n \n   \n   \n   \n \n \n \n \n \n \n \n Share capital \n \n \n Share premium account \n \n \n Own shares reserve \n \n \n Capital redemption reserve \n \n \n Other reserves \n \n \n Translation reserves \n \n \n Retained earnings \n \n \n Equity attributable to equity holders of the parent \n \n \n Non-controlling interests \n \n \n Total equity \n \n \n \n \n   \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n 1 January 2023 \n \n \n 33.1 \n \n \n 177.1 \n \n \n (5.2) \n \n \n 129.8 \n \n \n 5.1 \n \n \n 81.2 \n \n \n 359.8 \n \n \n 780.9 \n \n \n 1.1 \n \n \n 782.0 \n \n \n \n \n Profit for the year \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 85.6 \n \n \n 85.6 \n \n \n 1.2 \n \n \n 86.8 \n \n \n \n \n Exchange differences on translation of overseas operations \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (28.9) \n \n \n - \n \n \n (28.9) \n \n \n (0.8) \n \n \n (29.7) \n \n \n \n \n Movements on hedges of net investments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1.5 \n \n \n - \n \n \n - \n \n \n 1.5 \n \n \n - \n \n \n 1.5 \n \n \n \n \n Movements on cash flow hedges \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 0.4 \n \n \n   \n \n \n - \n \n \n 0.4 \n \n \n - \n \n \n 0.4 \n \n \n \n \n Actuarial losses on defined benefit pension schemes net of deferred tax \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (0.1) \n \n \n (0.1) \n \n \n - \n \n \n (0.1) \n \n \n \n \n Total comprehensive income for the year \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1.9 \n \n \n (28.9) \n \n \n 85.5 \n \n \n 58.5 \n \n \n 0.4 \n \n \n 58.9 \n \n \n \n \n Shares acquired in the year \n \n \n - \n \n \n - \n \n \n (13.2) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (13.2) \n \n \n - \n \n \n (13.2) \n \n \n \n \n Settlement of share awards \n \n \n - \n \n \n - \n \n \n 2.8 \n \n \n - \n \n \n (2.0) \n \n \n - \n \n \n (0.8) \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Share-based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 5.1 \n \n \n - \n \n \n - \n \n \n 5.1 \n \n \n - \n \n \n 5.1 \n \n \n \n \n Deferred tax on share-based payment transactions \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 0.1 \n \n \n 0.1 \n \n \n - \n \n \n 0.1 \n \n \n \n \n Dividends \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (40.6) \n \n \n (40.6) \n \n \n - \n \n \n (40.6) \n \n \n \n \n 31 December 2023 \n \n \n 33.1 \n \n \n 177.1 \n \n \n (15.6) \n \n \n 129.8 \n \n \n 10.1 \n \n \n 52.3 \n \n \n 404.0 \n \n \n 790.8 \n \n \n 1.5 \n \n \n 792.3 \n \n \n \n \n   \n Included in other reserves is a share-based payments reserve of £9.8m ( 31 December 2023: £9.7m; 30 June 2023 £8.9m ). \n   \n The capital redemption reserve of £130.4m consists of £129.8m transferred from retained earnings to a capital redemption reserve relating to the conversion of B shares into deferred shares in 2008 and 2009 and £ 0.6m resulting from the repurchase of 3,748,973 shares at a nominal value of 17 3 / 11 p for a total cost of £ 27.0m. Refer to note 9 for more information. \n   \n The own shares reserve represents the cost of shares in Bodycote plc purchased in the market and held by the Bodycote International Employee Benefit Trust to satisfy share-based payments under the Group's incentive schemes. At 30 June 2024, 1,829,680 ( 31 December 2023: 2,292,243; 30 June 2023 2,148,679 ) ordinary shares of 17 3 / 11 p each were held by the Bodycote International Employee Benefit Trust. \n   \n   \n Notes to the condensed consolidated interim financial statements \n Accounting policies \n   \n Basis of preparation \n These unaudited condensed consolidated interim financial statements for the half year ended 30 June 2024 have been prepared in accordance with the UK adopted International Accounting Standards 34, 'Interim financial reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority (FCA).  \n   \n The Group has applied the Standards and Interpretations issued by the International Accounting Standards Board (IASB) and the international Financial Reporting Interpretations Committee of the IASB (IFRS IC) as adopted by the UK Endorsement Board (UKEB). International Accounting Standards as adopted by the UKEB (UK IFRS) are subject to ongoing amendment by the IASB and subsequent endorsement by the UKEB before they become UK-adopted International Accounting Standards and are therefore subject to change. \n   \n These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements for the year ended 31 December 2023, which were prepared in accordance with UK IFRS and with the requirements of the Companies Act 2006 as applicable to companies reporting under these standards. \n   \n The financial information 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 2023 has been delivered to the Registrar of Companies. The auditors have reported on those accounts; their reports were (i) unqualified and (ii) did not contain a statement under section 498 (2) or (3) of the UK Companies Act 2006. These condensed consolidated interim financial statements have not been audited. \n   \n The Group's operations are not significantly affected by seasonality. \n   \n Going concern \n In adopting the going concern basis for preparing the 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 considered its principal risks and uncertainties. \n   \n The Financial Review included in this Report 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 28-32 of the Group's Annual Report for the year ended 31 December 2023 and remain unchanged. \n   \n The Group has modelled a base case which reflects the Directors' current expectations of future trading over a 17 month period ended 31 December 2025. In addition, a downside scenario has been modelled to include potential severe but plausible negative impacts on revenues, profits and cash flows. \n   \n The base case scenario is built on the Group's latest forecasts for 2024 extended to December 2025 which show an improvement in both revenue and profits compared to 2023. 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 revenues across all of the Group's revenue lines and is intended to reflect the potential effect of a sudden and severe economic downturn. The downside scenario includes revenue of around 26% below the base case over the 18 months to 31 December 2025 which represents a 7% year on year revenue decline in 2024 compared to 2023. Revenues for the full year 2025 in the downside scenario are a further 10% lower than the 2024 downside scenario. In mitigation to this severe sales decline, a 5% reduction in maintenance capex and a 50% reduction in expansionary capex compared to the base case has been assumed, together with the assumption that there is no growth in dividends from 2023. The downside case assumes that the share buyback, which is expected to result in a cash outflow of circa £30m between July and December 2024, continues in full. \n   \n In performing the assessment, management 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, the Group continues to maintain sufficient liquidity and meets its gearing and interest cover covenants under the Revolving Credit Facility with substantial headroom. \n   \n Management also performed a reverse stress test. This indicated that revenue in the second half of 2024 would need to decline by over 24% compared to 2023 levels, with a further 27% decline in the full year 2025 revenue compared to 2024 to breach the Group's loan covenants at 31 December 2025. In this scenario, which contained the same mitigations as the downside scenario, minimum liquidity was over £100m throughout the entire period. \n   \n 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 taken into account the capacity under existing committed facilities only, being predominantly the Group's Revolving Credit Facility.  \n   \n The Group has access to a £250.9m Revolving Credit Facility maturing in May 2027. The Group's committed facilities at 30 June 2024 totalled £260.3m while uncommitted facilities totalled £62.8m. The Group's Revolving Credit Facility had drawings of £89.0m (31 December 2023: £32.1m; 30 June 2023: £52.4m) and the Group had net debt excluding lease liabilities of £68.0m (31 December 2023: net cash of £12.6m; 30 June 2023: £26.6m). The liquidity headroom was £193.0m as at 30 June 2024 (31 December 2023: £273.5m; 30 June 2023: £228.8m), excluding uncommitted facilities.  \n   \n In performing the assessment, the current and plausible impact of macro-economic factors, including ongoing international conflicts, climate change, political instability in certain markets and inflation, were considered. \n   \n After reviewing the current liquidity position, committed funding facilities, the base case and severe but plausible downside financial forecasts incorporating the uncertainties described above, the Directors have a reasonable expectation that the Group has sufficient resources to continue in operation for the foreseeable future. For these reasons the Directors continue to adopt the going concern basis of accounting in preparing the Group's condensed consolidated interim financial statements. \n   \n Changes in accounting policies \n The same accounting policies, presentation and methods of computation are followed in the condensed consolidated interim financial statements as were applied in the Group's latest annual audited financial statements, except determining the tax charge for the interim period under IAS 34, where the Group has applied the forecast annual effective corporate income tax rate to the pre-tax income for the six month period. \n   \n Areas of judgement and accounting estimates \n The Group's latest annual audited financial statements set out the key sources of estimation uncertainty and the critical judgements that were made in preparing those financial statements. These related to the assumptions used to account for retirement benefit schemes under IAS 19 (revised), the decision to not recognise an asset in relation to the surplus on the UK defined benefit pension scheme and the recognition of tax provisions. There have been no changes to these key sources of estimation uncertainty or these critical judgements since year end. \n   \n The valuation of intangible assets arising on the acquisition of Lake City Heat Treating requires an assessment of the fair value of those assets. Refer to note 7. That assessment requires the business to determine the future benefits that a market participant would expect to obtain from those assets as well as a discount rate and so is subject to significant estimation. If different estimates were used, the valuation of goodwill and intangible assets arising on the acquisition would change with no effect on profit.   \n   \n The economy in Turkey is classified as a hyperinflationary economy under UK IFRS and remains subject to high inflation. The Group has concluded that applying IAS 29 (Financial Reporting in Hyperinflationary Economies) is not required as the impact of adopting this standard is not material. The Group will continue to assess the position going forward. \n   \n The Group recognises climate change as a principal risk which is reported within other areas of judgement and accounting estimates in the consolidated financial statements within the Annual Report for the year ended 31 December 2023. Growing awareness of climate change and customer sustainability targets will provide opportunities for growth as we provide services and solutions that increase efficiency and reduce energy use. The Group's view is that climate change does not create any further material estimation uncertainty at this time. \n   \n New standards and interpretations not yet applied \n At the date of authorisation of these condensed consolidated interim financial statements, the Group has not applied the following new IFRS Standards that have been issued but are not yet effective. They are not expected to have a material impact on the Group. \n   \n ·    The International Sustainability Standards Board (ISSB) h as issued amendments to the Sustainability Accounting Standards Board (SASB) standards effective for annual reporting periods beginning on or after 1 January 2025. \n ·    A new IFRS standard, IFRS 18, has been issued by the IASB, applicable for annual reporting periods beginning on or after January 2027. It sets out the requirements for the presentation and disclosure of information in general purpose financial statements to ensure they provide relevant information that represents an entity's assets, liabilities, equity, income and expenses. The impacts of this standard on the disclosure and presentation is under review. \n   \n At the date of the approval of these condensed consolidated interim financial statements, there were no other new or revised IFRSs, amendments or interpretations in issue but not yet effective that are potentially material to the Group and which have not yet been applied. \n   \n Revised standards applied in the current year \n A number of amended standards became applicable during the current reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards and they did not have a material impact. The amendments were: \n   \n ·    Amendment to IFRS 16 lease liability on sale and leaseback, effective from 1 January 2024. \n ·    Amendments to IAS 1 classification of liabilities as current or non-current, effective 1 January 2024. \n ·    Amendments to IAS 1 non-current liabilities with covenants, effective from 1 January 2024. \n ·    Amendments to IAS 7 and IFRS 7 relating to supplier finance arrangements effective 1 January 2024. \n   \n 1.         Business and geographical segments \n The Group has more than 165 locations across the world serving a range of market sectors with various thermal processing services. The range and type of services offered is common to all market sectors. \n   \n In accordance with IFRS 8 Operating Segments, the segmentation of Group activity reflects the way the Group is managed by the chief operating decision maker, being the Group Chief Executive, who regularly reviews the operating performance of six operating segments, split between the Aerospace, Defence & Energy (ADE) and Automotive & General Industrial (AGI) business areas, as follows: \n   \n ·      ADE - Western Europe; \n ·      ADE - North America; \n ·      ADE - Emerging Markets; \n ·      AGI - Western Europe; \n ·      AGI - North America; and \n ·      AGI - Emerging Markets. \n   \n The split of operating segments by geography reflects the business reporting structure of the Group. \n   \n We have also presented combined results of our two key business areas, ADE and AGI, the split being driven by customer behaviour and requirements, geography and services provided. Customers in the ADE segment tend to operate and purchase more globally and have long supply chains, whilst customers in the AGI segment tend to purchase more locally and have shorter supply chains. \n   \n Bodycote plants do not exclusively supply services to customers of a given market sector. Allocations of plants between ADE and AGI is therefore derived by reference to the preponderance of markets served. \n   \n   \n \n \n \n \n \n \n \n   \n \n \n Half year to 30 June 2024 \n \n \n   \n \n \n \n \n   \n \n \n ADE \n \n \n AGI \n \n \n Central costs and eliminations \n \n \n Consolidated \n \n \n \n \n Group \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n Revenue \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Total revenue \n \n \n 187.5 \n \n \n 211.5 \n \n \n - \n \n \n 399.0 \n \n \n \n \n Result \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Headline operating profit 1 prior to share-based payments and unallocated central costs \n \n \n 44.6 \n \n \n 34.9 \n \n \n - \n \n \n 79.5 \n \n \n \n \n Share-based payments (including social charges) 2 \n \n \n (1.4) \n \n \n (1.1) \n \n \n (1.8) \n \n \n (4.3) \n \n \n \n \n Unallocated central costs \n \n \n - \n \n \n - \n \n \n (8.4) \n \n \n (8.4) \n \n \n \n \n Headline operating profit/(loss) \n \n \n 43.2 \n \n \n 33.8 \n \n \n (10.2) \n \n \n 66.8 \n \n \n \n \n Amortisation of acquired intangible assets \n \n \n (4.5) \n \n \n (0.8) \n \n \n - \n \n \n (5.3) \n \n \n \n \n Acquisition costs \n \n \n (2.4) \n \n \n - \n \n \n - \n \n \n (2.4) \n \n \n \n \n Operating profit/(loss) prior to exceptional items \n \n \n 36.3 \n \n \n 33.0 \n \n \n (10.2) \n \n \n 59.1 \n \n \n \n \n Exceptional items \n \n \n - \n \n \n - \n \n \n (28.3) \n \n \n (28.3) \n \n \n \n \n Segment result \n \n \n 36.3 \n \n \n 33.0 \n \n \n (38.5) \n \n \n 30.8 \n \n \n \n \n Finance income \n \n \n   \n \n \n   \n \n \n   \n \n \n 0.4 \n \n \n \n \n Finance charge \n \n \n   \n \n \n   \n \n \n   \n \n \n (5.0) \n \n \n \n \n Profit before taxation \n \n \n   \n \n \n   \n \n \n   \n \n \n 26.2 \n \n \n \n \n Taxation \n \n \n   \n \n \n   \n \n \n   \n \n \n (6.5) \n \n \n \n \n Profit for the period \n \n \n   \n \n \n   \n \n \n   \n \n \n 19.7 \n \n \n \n \n   \n 1       Headline operating profit is an alternative performance measure and is defined in the APM section. \n 2       Includes £0.6m social security charges (31 December 2023: £0.8m; 30 June 2024: £0.9m). \n   \n Inter-segment revenues are not material in either year. \n   \n The Group does not have any one customer that contributes more than 10% of revenue. \n   \n \n \n \n \n \n \n \n Half year to 30 June 2024 \n \n \n \n \n   \n \n \n Western Europe \n \n \n North America \n \n \n Emerging markets \n \n \n Total ADE \n \n \n \n \n Aerospace, Defence & Energy \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n Revenue \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Total revenue \n \n \n 81.8 \n \n \n 101.7 \n \n \n 4.0 \n \n \n 187.5 \n \n \n \n \n Result \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Headline operating profit prior to share-based payments \n \n \n 21.4 \n \n \n 22.8 \n \n \n 0.4 \n \n \n 44.6 \n \n \n \n \n Share-based payments (including social charges) \n \n \n (0.5) \n \n \n (0.9) \n \n \n - \n \n \n (1.4) \n \n \n \n \n Headline operating profit \n \n \n 20.9 \n \n \n 21.9 \n \n \n 0.4 \n \n \n 43.2 \n \n \n \n \n Amortisation of acquired intangible assets \n \n \n (0.2) \n \n \n (4.3) \n \n \n - \n \n \n (4.5) \n \n \n \n \n Acquisition costs \n \n \n - \n \n \n (2.4) \n \n \n - \n \n \n (2.4) \n \n \n \n \n Segment result \n \n \n 20.7 \n \n \n 15.2 \n \n \n 0.4 \n \n \n 36.3 \n \n \n \n \n   \n \n \n \n \n \n \n \n Half year to 30 June 2024 \n \n \n \n \n   \n \n \n Western Europe \n \n \n North America \n \n \n Emerging markets \n \n \n Total AGI \n \n \n \n \n Automotive & General Industrial \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n Revenue \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Total revenue \n \n \n 119.2 \n \n \n 49.4 \n \n \n 42.9 \n \n \n 211.5 \n \n \n \n \n Result \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Headline operating profit prior to share-based payments \n \n \n 22.1 \n \n \n 4.9 \n \n \n 7.9 \n \n \n 34.9 \n \n \n \n \n Share-based payments (including social charges) \n \n \n (0.5) \n \n \n (0.4) \n \n \n (0.2) \n \n \n (1.1) \n \n \n \n \n Headline operating profit \n \n \n 21.6 \n \n \n 4.5 \n \n \n 7.7 \n \n \n 33.8 \n \n \n \n \n Amortisation of acquired intangible assets \n \n \n (0.2) \n \n \n (0.4) \n \n \n (0.2) \n \n \n (0.8) \n \n \n \n \n Segment result \n \n \n 21.4 \n \n \n 4.1 \n \n \n 7.5 \n \n \n 33.0 \n \n \n \n \n   \n   \n \n \n \n \n   \n   \n \n \n Half year to 30 June 2023 \n \n \n \n \n   \n \n \n ADE \n \n \n AGI \n \n \n   \n Central costs and \n eliminations \n \n \n Consolidated \n \n \n \n \n Group \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n Revenue \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total revenue \n \n \n 180.5 \n \n \n 239.6 \n \n \n - \n \n \n 420.1 \n \n \n \n \n Result \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Headline operating profit prior to share-based payments and unallocated central costs \n \n \n 33.1 \n \n \n 45.6 \n \n \n - \n \n \n 78.7 \n \n \n \n \n Share-based payments (including social charges) \n \n \n (0.9) \n \n \n (1.9) \n \n \n (2.4) \n \n \n (5.2) \n \n \n \n \n Unallocated central costs \n \n \n - \n \n \n - \n \n \n (10.7) \n \n \n (10.7) \n \n \n \n \n Headline operating profit/(loss) \n \n \n 32.2 \n \n \n 43.7 \n \n \n (13.1) \n \n \n 62.8 \n \n \n \n \n Amortisation of acquired intangible assets \n \n \n (3.3) \n \n \n (0.8) \n \n \n - \n \n \n (4.1) \n \n \n \n \n Segment result \n \n \n 28.9 \n \n \n 42.9 \n \n \n (13.1) \n \n \n 58.7 \n \n \n \n \n Finance income \n \n \n   \n \n \n \n \n \n \n \n \n 0.5 \n \n \n \n \n Finance costs \n \n \n \n \n \n   \n \n \n \n \n \n (4.0) \n \n \n \n \n Profit before taxation \n \n \n   \n \n \n \n \n \n \n \n \n 55.2 \n \n \n \n \n Taxation \n \n \n \n \n \n   \n \n \n \n \n \n (12.3) \n \n \n \n \n Profit for the period \n \n \n \n \n \n   \n \n \n \n \n \n 42.9 \n \n \n \n \n   \n \n \n \n \n \n \n \n Half year to 30 June 2023 \n \n \n \n \n   \n \n \n Western Europe \n \n \n North America \n \n \n Emerging markets \n \n \n Total ADE \n \n \n \n \n Aerospace, Defence & Energy \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n Revenue \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total revenue \n \n \n 84.6 \n \n \n 92.3 \n \n \n 3.6 \n \n \n 180.5 \n \n \n \n \n Result \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Headline operating profit prior to share-based payments \n \n \n 18.4 \n \n \n 14.8 \n \n \n (0.1) \n \n \n 33.1 \n \n \n \n \n Share-based payments (including social charges) \n \n \n (0.3) \n \n \n (0.6) \n \n \n - \n \n \n (0.9) \n \n \n \n \n Headline operating profit/(loss) \n \n \n 18.1 \n \n \n 14.2 \n \n \n (0.1) \n \n \n 32.2 \n \n \n \n \n Amortisation of acquired intangible assets \n \n \n (0.2) \n \n \n (3.1) \n \n \n - \n \n \n (3.3) \n \n \n \n \n Segment result \n \n \n 17.9 \n \n \n 11.1 \n \n \n (0.1) \n \n \n 28.9 \n \n \n \n \n   \n \n \n \n \n \n \n \n Half year to 30 June 2023 \n \n \n \n \n   \n \n \n Western Europe \n \n \n North America \n \n \n Emerging markets \n \n \n Total AGI \n \n \n \n \n Automotive & General Industrial \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n Revenue \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total revenue \n \n \n 136.5 \n \n \n 54.2 \n \n \n 48.9 \n \n \n 239.6 \n \n \n \n \n Result \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Headline operating profit prior to share-based payments \n \n \n 29.7 \n \n \n 5.5 \n \n \n 10.4 \n \n \n 45.6 \n \n \n \n \n Share-based payments (including social charges) \n \n \n (1.4) \n \n \n (0.4) \n \n \n (0.1) \n \n \n (1.9) \n \n \n \n \n Headline operating profit \n \n \n 28.3 \n \n \n 5.1 \n \n \n 10.3 \n \n \n 43.7 \n \n \n \n \n Amortisation of acquired intangible assets \n \n \n (0.2) \n \n \n (0.4) \n \n \n (0.2) \n \n \n (0.8) \n \n \n \n \n Segment result \n \n \n 28.1 \n \n \n 4.7 \n \n \n 10.1 \n \n \n 42.9 \n \n \n \n \n   \n   \n   \n \n \n \n \n \n \n \n Year ended 31 December 2023 (audited) \n \n \n \n \n   \n \n \n ADE \n \n \n AGI \n \n \n   \n Central costs and eliminations \n \n \n Consolidated \n \n \n \n \n Group \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n Revenue \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total revenue \n \n \n 355.5 \n \n \n 447.0 \n \n \n - \n \n \n 802.5 \n \n \n \n \n Result \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Headline operating profit prior to share-based payments and unallocated central costs \n \n \n 71.2 \n \n \n 80.8 \n \n \n - \n \n \n 152.0 \n \n \n \n \n Share-based payments (including social charges) \n \n \n (1.7) \n \n \n (1.5) \n \n \n (2.7) \n \n \n (5.9) \n \n \n \n \n Unallocated central costs \n \n \n - \n \n \n - \n \n \n (18.5) \n \n \n (18.5) \n \n \n \n \n Headline operating profit/(loss) \n \n \n 69.5 \n \n \n 79.3 \n \n \n (21.2) \n \n \n 127.6 \n \n \n \n \n Amortisation of acquired intangible assets \n \n \n (6.4) \n \n \n (1.7) \n \n \n - \n \n \n (8.1) \n \n \n \n \n Acquisition costs \n \n \n - \n \n \n - \n \n \n (0.3) \n \n \n (0.3) \n \n \n \n \n Segment result \n \n \n 63.1 \n \n \n 77.6 \n \n \n (21.5) \n \n \n 119.2 \n \n \n \n \n Finance income \n \n \n   \n \n \n \n \n \n \n \n \n 0.8 \n \n \n \n \n Finance costs \n \n \n \n \n \n   \n \n \n \n \n \n (8.3) \n \n \n \n \n Profit before taxation \n \n \n   \n \n \n \n \n \n \n \n \n 111.7 \n \n \n \n \n Taxation \n \n \n \n \n \n   \n \n \n \n \n \n (24.9) \n \n \n \n \n Profit for the year \n \n \n \n \n \n   \n \n \n \n \n \n 86.8 \n \n \n \n \n   \n \n \n \n \n \n \n \n Year ended 31 December 2023 (audited) \n \n \n   \n \n \n \n \n   \n \n \n Western Europe \n \n \n North America \n \n \n Emerging markets \n \n \n Total ADE \n \n \n   \n \n \n \n \n Aerospace, Defence & Energy \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n   \n \n \n \n \n Revenue \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Total revenue \n \n \n 162.8 \n \n \n 185.1 \n \n \n 7.6 \n \n \n 355.5 \n \n \n   \n \n \n \n \n Result \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Headline operating profit prior to share-based payments \n \n \n 36.2 \n \n \n 35.2 \n \n \n (0.2) \n \n \n 71.2 \n \n \n   \n \n \n \n \n Share-based payments (including social charges) \n \n \n (0.8) \n \n \n (0.9) \n \n \n - \n \n \n (1.7) \n \n \n   \n \n \n \n \n Headline operating profit/(loss) \n \n \n 35.4 \n \n \n 34.3 \n \n \n (0.2) \n \n \n 69.5 \n \n \n   \n \n \n \n \n Amortisation of acquired intangible assets \n \n \n (0.4) \n \n \n (6.0) \n \n \n - \n \n \n (6.4) \n \n \n   \n \n \n \n \n Segment result \n \n \n 35.0 \n \n \n 28.3 \n \n \n (0.2) \n \n \n 63.1 \n \n \n   \n \n \n \n \n \n \n \n   \n   \n Year ended 31 December 2023 (audited) \n \n \n \n \n   \n \n \n Western Europe \n \n \n North America \n \n \n Emerging markets \n \n \n Total AGI \n \n \n \n \n Automotive & General Industrial \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n Revenue \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total revenue \n \n \n 254.6 \n \n \n 102.4 \n \n \n 90.0 \n \n \n 447.0 \n \n \n \n \n Result \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Headline operating profit prior to share-based payments \n \n \n 54.7 \n \n \n 10.1 \n \n \n 16.0 \n \n \n 80.8 \n \n \n \n \n Share-based payments (including social charges) \n \n \n (1.0) \n \n \n (0.1) \n \n \n (0.4) \n \n \n (1.5) \n \n \n \n \n Headline operating profit \n \n \n 53.7 \n \n \n 10.0 \n \n \n 15.6 \n \n \n 79.3 \n \n \n \n \n Amortisation of acquired intangible assets \n \n \n (0.4) \n \n \n (0.9) \n \n \n (0.4) \n \n \n (1.7) \n \n \n \n \n Segment result \n \n \n 53.3 \n \n \n 9.1 \n \n \n 15.2 \n \n \n 77.6 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n 2. Exceptional Items \n   \n \n \n \n \n Year ended \n \n \n   \n \n \n Half year to \n \n \n Half year to \n \n \n \n \n 31 Dec 2023 \n \n \n   \n \n \n 30 June 2024 \n \n \n 30 June 2023 \n \n \n \n \n (audited) \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n £m \n \n \n   \n \n \n £m \n \n \n £m \n \n \n \n \n - \n \n \n Impairment of intangible assets \n \n \n 28.3 \n \n \n - \n \n \n \n \n - \n \n \n Total exceptional items \n \n \n 28.3 \n \n \n - \n \n \n \n \n   \n Since 2020, the Group has been developing an ERP software solution. Included within intangible assets at 31 December 2023 were £32.2m of internally developed software costs relating to the development of this ERP system that was not available for use.  Development of this ERP solution progressed through H1 2024 with a further £3.1m capitalised in the six months ended 30 June 2024.  During that period, a pilot programme continued at a small number of sites across the Group.  \n   \n The solution includes two components: an Operations module and a Finance and Procurement module. \n   \n During the first half of 2024, the Directors were regularly updated on the programme, including the initial results of the pilot programme. Consideration was given to various \"way-forward\" options for the ERP system, ultimately concluding that the future benefits of the Operations module of the system did not outweigh the likely future costs. Consideration was also given to the business interruption challenges of rolling out the Operations module across the Group's multiple sites. As a result, the decision was reached to cease further development and roll-out of the Operations module, resulting in an exceptional impairment of £28.3m in the six months ended 30 June 2024. \n   \n Full roll-out of the Finance and Procurement module across the Group continues and is expected to complete in the first half of 2026. The remaining intangible asset of £7.0m will be amortised over its useful life of 15 years beginning 1 July 2024. \n   \n 3. Taxation charge \n   \n \n \n \n \n Year ended \n \n \n   \n \n \n Half year to \n \n \n Half year to \n \n \n \n \n 31 Dec 2023 \n \n \n   \n \n \n 30 June 2024 \n \n \n 30 June 2023 \n \n \n \n \n (audited) \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n £m \n \n \n   \n \n \n £m \n \n \n £m \n \n \n \n \n 26.0 \n \n \n Current taxation - charge for the period \n \n \n 13.1 \n \n \n 12.8 \n \n \n \n \n (2.7) \n \n \n Current taxation - adjustments in respect of previous years \n \n \n (0.1) \n \n \n - \n \n \n \n \n 1.6 \n \n \n Deferred tax \n \n \n (6.5) \n \n \n (0.5) \n \n \n \n \n 24.9 \n \n \n Total taxation charge \n \n \n 6.5 \n \n \n 12.3 \n \n \n \n \n   \n The headline rate of tax for the six months ended 30 June 2024 wa s 23.5% (31 December 2023: 22.5%; 30 June 2023: 22.5%) on the headline operating profit before tax. The statutory effective tax rate was 24.8% (31 December 2023 : 22.3%; 30 June 2023: 22.3%). \n   \n 4. Dividends \n   \n \n \n \n \n Year ended \n \n \n   \n \n \n Half year to \n \n \n Half year to \n \n \n \n \n 31 Dec 2023 \n \n \n   \n \n \n 30 June 2024 \n \n \n 30 June 2023 \n \n \n \n \n (audited) \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n £m \n \n \n   \n \n \n £m \n \n \n £m \n \n \n \n \n   \n \n \n Amounts recognised as distributions to equity holders in the period: \n \n \n   \n \n \n   \n \n \n \n \n 28.5 \n \n \n Final dividend for the year ended 31 December 2022 of 14.9p per share \n \n \n - \n \n \n 28.5 \n \n \n \n \n 12.7 \n \n \n Interim dividend for the year ended 31 December 2023 of 6.7p per share \n \n \n - \n \n \n - \n \n \n \n \n - \n \n \n Final dividend for the year ended 31 December 2023 of 16.0p per share \n \n \n 30.1 \n \n \n - \n \n \n \n \n 41.2 \n \n \n   \n \n \n 30.1 \n \n \n 28.5 \n \n \n \n \n   \n \n \n Interim dividend for the year ending 31 December 2024 of 6.9p per share \n \n \n 12.8 \n \n \n   \n \n \n \n \n   \n The Board approved the payment of an interim dividend for 2024 of 6.9p to those shareholders on the register of Bodycote plc on 4 October 2024 to be paid on 7 November 2024. The dividend has not been included as a liability in these condensed consolidated interim financial statements. \n   \n The dividends are waived on shares held by the Bodycote International Employee Benefit Trust. \n   \n Dividends payable to minority interest shareholders were £0.1m (31 December 2023 £nil ; 30 June 2023: £nil). \n   \n   \n 5. Earnings per share \n The calculation of the basic and diluted earnings per share is based on the following data: \n \n \n \n \n Year ended \n \n \n   \n \n \n Half year to \n \n \n Half year to \n \n \n \n \n 31 Dec 2023 \n \n \n   \n \n \n 30 June 2024 \n \n \n 30 June 2023 \n \n \n \n \n (audited) \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n £m \n \n \n   \n \n \n £m \n \n \n £m \n \n \n \n \n   \n \n \n Earnings \n \n \n   \n \n \n   \n \n \n \n \n 85.6 \n \n \n Earnings for the purpose of basic earnings per share being net profit attributable to equity holders of the parent \n \n \n 19.3 \n \n \n 42.3 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Number \n \n \n   \n \n \n Number \n \n \n Number \n \n \n \n \n   \n \n \n Number of shares \n \n \n   \n \n \n   \n \n \n \n \n 189,877,099 \n \n \n Weighted average number of ordinary shares for the purpose of basic earnings per share \n \n \n 188,358,702 \n \n \n 190,603,804 \n \n \n \n \n   \n \n \n Effect of dilutive potential ordinary shares: \n \n \n   \n \n \n   \n \n \n \n \n 661,721 \n \n \n Shares subject to performance conditions \n \n \n 79,045 \n \n \n 278,130 \n \n \n \n \n 344,050 \n \n \n Shares subject to vesting conditions \n \n \n 474,116 \n \n \n 217,088 \n \n \n \n \n 190,882,870 \n \n \n Weighted average number of ordinary shares for the purpose of diluted earnings per share \n \n \n 188,911,863 \n \n \n 191,099,022 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Pence \n \n \n   \n \n \n Pence \n \n \n Pence \n \n \n \n \n   \n \n \n Earnings per share: \n \n \n   \n \n \n   \n \n \n \n \n 45.1 \n \n \n Basic \n \n \n 10.2 \n \n \n 22.2 \n \n \n \n \n 44.8 \n \n \n Diluted \n \n \n 10.2 \n \n \n 22.1 \n \n \n \n \n   \n \n \n \n \n Year ended \n \n \n   \n \n \n Half year to \n \n \n Half year to \n \n \n \n \n 31 Dec 23 \n \n \n   \n \n \n 30 June 24 \n \n \n 30 June 23 \n \n \n \n \n (audited) \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n £m \n \n \n   \n \n \n £m \n \n \n £m \n \n \n \n \n   \n \n \n Headline earnings \n \n \n \n \n \n \n \n \n \n \n 85.6 \n \n \n Net profit attributable to equity holders of the parent \n \n \n 19.3 \n \n \n 42.3 \n \n \n \n \n   \n \n \n Add back: \n \n \n   \n \n \n   \n \n \n \n \n 6.1 \n \n \n Amortisation of acquired intangible assets (net of tax) \n \n \n 4.0 \n \n \n 3.1 \n \n \n \n \n 0.2 \n \n \n Acquisition costs (net of tax) \n \n \n 1.8 \n \n \n - \n \n \n \n \n - \n \n \n Exceptional items (net of tax) \n \n \n 22.1 \n \n \n - \n \n \n \n \n 91.9 \n \n \n Headline earnings \n \n \n 47.2 \n \n \n 45.4 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Pence \n \n \n   \n \n \n Pence \n \n \n Pence \n \n \n \n \n   \n \n \n Headline earnings per share: \n \n \n   \n \n \n   \n \n \n \n \n 48.4 \n \n \n Basic \n \n \n 25.0 \n \n \n 23.8 \n \n \n \n \n 48.1 \n \n \n Diluted \n \n \n 25.0 \n \n \n 23.7 \n \n \n \n \n                                                                                                                                              \n As at 30 June 2024 the performance conditions for most open share-based payment plans have not been met resulting in a nil dilution of earnings per share, in accordance with IAS 33 (31 December 2023: 0.3p; 30 June 2023: 0.1p) and nil dilution of headline earnings per share (31 December 2023: 0.3p; 30 June 2023: 0.1p). \n   \n 6. Goodwill \n \n \n \n \n As at \n \n \n   \n \n \n As at \n \n \n As at \n \n \n \n \n 31 Dec 2023 \n \n \n   \n \n \n 30 June 2024 \n \n \n 30 June 2023 \n \n \n \n \n (audited) \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n £m \n \n \n   \n \n \n £m \n \n \n £m \n \n \n \n \n   \n \n \n Cost \n \n \n   \n \n \n   \n \n \n \n \n 288.9 \n \n \n At 1 January \n \n \n 282.3 \n \n \n 288.9 \n \n \n \n \n (6.6) \n \n \n Exchange differences \n \n \n (0.3) \n \n \n (7.3) \n \n \n \n \n - \n \n \n Recognised on acquisition of businesses \n \n \n 3.9 \n \n \n - \n \n \n \n \n 282.3 \n \n \n Total cost \n \n \n 285.9 \n \n \n 281.6 \n \n \n \n \n   \n \n \n Accumulated impairment \n \n \n   \n \n \n   \n \n \n \n \n 61.1 \n \n \n At 1 January \n \n \n 60.8 \n \n \n 61.1 \n \n \n \n \n (0.3) \n \n \n Exchange differences \n \n \n - \n \n \n (0.4) \n \n \n \n \n 60.8 \n \n \n Total accumulated impairment \n \n \n 60.8 \n \n \n 60.7 \n \n \n \n \n 221.5 \n \n \n Carrying amount \n \n \n 225.1 \n \n \n 220.9 \n \n \n \n \n   \n Goodwill acquired through business combinations is allocated to the cash generating units (CGUs) that are expected to benefit from the synergies of the combination. The recoverable amounts of these CGUs are the higher of fair value less costs to dispose and value-in-use. Goodwill is allocated across the Group's segments as follows: \n   \n \n \n \n \n As at \n \n \n   \n \n \n As at \n \n \n As at \n \n \n \n \n 31 Dec...

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