Bodycote eyes buybacks, shares jump 6%

Bodycote’s share price (LSE: BOY) jumped over 6% on Monday after it set out buyback plans. The stock closed at 633.09p, making it the top FTSE 250 riser.

The supplier of heat treatments said it plans for a £60 million share repurchase programme after it failed to complete its proposed acquisition of Stack Metallurgical Group. The deal fell through owing to certain closing conditions not being met.

The company on Friday completed the $66.5 million purchase of Lake City Heat Treatment, a US-based hot isostatic pressing and vacuum heat treatment specialist. Bodycote described the acquisition as an “excellent fit” which enhances profitability.

Lake City generates annual revenues of around $14 million and made an operating profit of circa $6 million last year. Bodycote said it expects the business to continue delivering good progress.

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Chief Executive Stephen Harris said the Lake City deal allows Bodycote to capitalise on “appealing structural growth opportunities” in the medical and aerospace markets.

Bodycote will provide further details on the share buyback plans when it releases full-year results on 15 March.