British engineering company Bodycote reported a 19 per cent rise in full-year profit on new contracts in its aerospace business.
The Macclesfield, Cheshire-based company, which heat-treats jet engine turbine blades and other aircraft and car 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 said.
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 per cent to 8.3 pence per share.
Bodycote said 2012 pretax profit rose to £89.8 million ($135.9 million) from £75.8 million a year earlier.
Revenue rose 3 per cent to £587.8 million.
Revenue in the aerospace, defence and energy businesses rose 12 per cent to £260.4 million.
Bodycote said demand fell in its automotive business in all geographies except North America.
"North American market will continue up at pace, it might take a bit longer in Europe," Harris said.
Demand for new cars has slumped in Europe as governments drive through austerity measures to reduce their debts.
Asian and U.S. markets, in contrast, have bounced back strongly from the global financial crisis.
Bodycote bought Curtiss-Wright's heat-treatment business for $52 million in April to expand in the U.S. aerospace industry.
It bought Carolina Commercial Heat Treating in October for $68 million.