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Bodycote Revenue Falls as Strong Pound, Defence Cuts Bite

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LONDON, (Reuters) – British engineering company Bodycote Plc said first-quarter revenue fell 2.2 percent in the face of a stronger sterling and defence budget cuts.
Shares in Bodycote, which heat-treats jet engine turbine blades and other aircraft and car parts, fell as much as 1.6 percent.
British capital goods companies that have a large exposure to non-UK markets have been hurt by a strengthening sterling. The pound has jumped almost 10 percent against the U.S. dollar in the year to March 31, 2014.
Defence revenue fell 2.3 percent in constant currency terms, although sales in the wider aerospace, defence and energy division rose 1.4 percent.
Overall revenue was 153 million pounds ($257 million) for the period ended March 31. Sales rose 2.8 percent at constant exchange rates.
The Macclesfield, United Kingdom-based company said sales in its industrial gas turbine business rose 9.3 percent in constant currency terms.
“We expect an improving industrial backdrop during 2014 … However further sterling strength since the prelims may mean we trim 1-2 percent off our estimates,” N+1 Singer brokerage analyst Jo Reedman said in a note.
Shares in Bodycote fell as low as 737.5 pence before recovering a little to 741 pence on the London Stock Exchange by 1012 GMT. ($1 = 0.5950 British Pounds) (Reporting by Tasim Zahid in Bangalore; Editing by Gopakumar Warrier).

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