Bodycote plc (LON:BOY), the world’s largest provider of heat treatments and specialist thermal processing services, today issued the following update.
Protective measures and business continuity
Bodycote’s primary concern has always been the safety and well-being of our stakeholders including our employees, customers and the wider community.
The reality of the COVID-19 pandemic has given this priority even greater predominance. Our facilities have implemented additional personal protection measures, intensified hygiene, and social distancing protocols that meet or exceed WHO, government and local guidelines. Our operations are being managed safely as we maximise business continuity to provide our essential services and continue to support our customers.
A COVID-19 task force convenes daily to monitor the situation and coordinate our activities on the ground while managing communications with our customers and employees, keeping them informed about the evolving situation.
Trading in the first quarter has not been significantly impacted by disruption from the pandemic. Nonetheless, we have already been taking mitigating actions in anticipation of tougher conditions to come. These actions are designed to align our cost base with any reduced demand and we will continue to take further action in response to developments and as we deem necessary.
Following the announcement today of the completion of the acquisition of Ellison Surface Technologies, Bodycote is approximately £83 million drawn on its £230 million revolving credit facility (RCF), which has two more years to run. Accordingly, there remains £147 million of immediately available liquidity. The Group’s current net debt: EBITDA gearing ratio is 0.7 times, well below the 3 times covenant ceiling permitted under the RCF. Bodycote has a very strong balance sheet and can withstand a significant decline in trading conditions. Nonetheless, given the uncertainty in the current environment the Board is keeping the proposal for the final dividend under review.
Stephen Harris, Group Chief Executive of Bodycote plc, commented: “Bodycote’s financial position is strong and our agile and devolved approach to managing the business from day to day puts us in a good position to weather the unprecedented disruption which we are likely to face. I also take this opportunity to recognise the commitment, courage and professionalism shown by our employees during this challenging time.”