Bodycote hit by collapse in demand from car makers

By DAILY MAIL REPORTER
Updated: 12:53 EST, 15 May 2009

Engineering firm Bodycote today warned of 'greater uncertainty' over demand this year after a further slide in sales during the first three months of 2009.

The Macclesfield-based firm, which specialises in heat treatments and metallurgical coatings, has been hit by a collapse in demand from car makers and construction firms.

While activity has been 'gradually picking up' in these areas, Bodycote is now seeing weakness in markets that were holding firm at the beginning of the year, such as aerospace, power, and oil and gas.

Engineering firm Bodycote has been hit by lessening demand from construction firms and car manufacturers

At constant exchange rates, Bodycote's overall sales slumped 26 per cent in the first three months of 2009.

'There is now greater uncertainty as to the level of demand for the balance of the year,' it added.

Bodycote also announced an expansion of the cost-cutting plans launched in February when it lurched into the red with pre-tax losses of £55.3million last year, against a £60.3million profit in 2007.

The firm announced a raft of site closures two months ago - expected to cost around 1,000 jobs - but today said the programme was being widened to make deeper cuts in continental Europe.

Bodycote added that it would reap the full benefit of the savings next year and remained confident in 'medium and long term prospects', although shares lost ground today.

Numis Securities analyst Nick Webster called the trading update 'brief but disappointing'.

'Of most concern is the softening of its aerospace, power and oil & gas markets - one-third of sales - which have thus far proven relatively resilient,' he said.