British engineering company Bodycote reported a 19 percent rise in full-year profit on new contracts in its aerospace business, but warned of modest growth this year due to the economic slowdown in Europe.
Bodycote, which heat-treats jet engine turbine blades and other aircraft parts, reported its strongest growth in commercial aerospace business in Europe due to increased demand for narrow-body aircraft.
Its equipment sales improved as Boeing and Airbus continued to increase production rates.
Bodycote, however, says it was likely to see moderate growth rates in aerospace this year. "We are in a little bit of a lull," Bodycote chief executive Stephen Harris told reporters.
Investec Securities analyst Michael Blogg said in a note to clients that he had been viewing 2013 and 2014 with caution and this is echoed by the company's experience in January.
Numis Securities analyst Scott Cagehin expects growth in Bodycote's aerospace and energy businesses to offset the effect of weaker economies and markets.
Bodycote, which also caters to mining, energy and construction companies, said it expected sales in the second half to be better than the first half.
Bodycote increased its final dividend by 14 percent to 8.3 pence per share.
Bodycote said 2012 pre-tax profit rose to GBP£89.8 million (USD$135.9 million) from GBP£75.8 million a year earlier.
Revenue rose 3 percent to GBP£587.8 million.
Revenue in the aerospace, military and energy businesses rose 12 percent to GBP£260.4 million.
Bodycote bought Curtiss-Wright's heat-treatment business for USD$52 million in April to expand in the US aerospace industry. It bought Carolina Commercial Heat Treating in October for USD$68 million.