Demand heats up for Bodycote's services

SHARES in Bodycote powered ahead by more than 14 per cent yesterday as the engineering company forecast operating profits would come in significantly ahead of expectations.

The firm said it was continuing to see a "steady and broad-based improvement in demand" for its services, which include heat treatment and metal coating for major industrial customers.

Revenue for the six months to 30 June is expected to be 8 per cent up on last year and the company is also benefiting from a wide-ranging restructuring and cost cutting programme which began in late 2008. Although Bodycote, which has operations throughout the UK, including Edinburgh, said demand remains uncertain and that sales in the second half would be lower due to seasonal effects, it expects headline operating profit for the year will be significantly higher than the top of the current range of full-year forecasts of between 27.2 million and 34.7m.

Michael Blogg at Arbuthnot Securities said: "The trading update for the first half of 2010 is more positive than we expected and our top-of-the-range estimates will rise by a significant amount."

Shares closed up 26.9p at 217.6p.