Overview

The macro-economic environment for Bodycote in the first half of 2016 showed little change from 2015. Notwithstanding this weak macro-economic backdrop, the quality of the Bodycote business continued to improve. The Group's headline operating margin¹ reduced only 110 basis points to 16.9%, even though revenues declined 8.1% (at constant exchange rates). Group revenue was £291.0m with currency translation reducing the year-on-year revenue decline to 2.9%. Headline operating profit for the Group was £49.3m in the first half of the year.

Financial highlights

	Half year to 30 June 2016
Revenue	£291.0m
Headline operating profit	£49.3m
Headline operating cash flow	£38.0m
Basic headline earnings per share	18.3p
Interim dividend per share	5.0p

Business ReviewAerospace, Defence & Energy (ADE)

Revenues for the ADE business were £121.9m in the six months to June 2016 compared with £128.8m in 2015, a decrease of 5.4%.

Business ReviewAutomotive & General Industrial (AGI)

Revenues for the AGI business were £169.1m in the first half of 2016, compared with £171.0m in 2015, a decrease of 1.1%.

Summary and outlook

The Group has again demonstrated its ability to deal with challenging market conditions, including delivery of a continued improvement in the AGI margin.