Spectris plc (LON:SXS), the productivity-enhancing instrumentation and controls company, issued a trading update covering the four months to 30 April 2019.
Group performance for the period has been in line with expectations.
Group like-for-like1 (‘LFL’) sales increased by 3%, despite the anticipated moderation in certain end markets. Growth from acquisitions, net of disposals, contributed a further 1% and foreign currency exchange movements increased sales by 2%, resulting in a 6% increase in reported sales in the period.
The Group continues to be highly cash generative, with a conversion of over 100% for the period, and maintains a strong financial position. Net debt at the end of April was £265 million, a decrease of
£32 million since the year end, after including capex of £28 million in the period.
By segment, there was strong LFL growth from In-line Instrumentation and in Materials Analysis, despite continued challenges at Concept Life Sciences. LFL sales declined in Test and Measurement and Industrial Controls. The LFL sales decline in Test and Measurement reflected a tough comparator in sales to the automotive industry in Europe compared with 2018, and Industrial Controls was impacted by
US-China tariffs and slowing US industrial production. From an end market perspective, growth was driven by demand from the energy and metals, minerals and mining industries as well as sales into academic research and semiconductor customers. Regionally, LFL sales increased notably in Asia partly offset by lower LFL sales into North America, whilst sales into Europe were flat year-on-year.
The Group remains focused on implementing the initiatives under its profit improvement programme and is on track to deliver the expected £15-20 million of benefits in 2019.
SUMMARY AND OUTLOOK
Overall, performance remains consistent with expectations for the full year, with the benefits from the profit improvement programme increasing our normal second half weighting. While we note some challenges due to macro-economic and geopolitical uncertainties, we continue to focus on driving sales growth and focusing on what we can control – delivering our plan to enhance margins. In addition, our strategic review work has progressed and highlights the opportunities our portfolio offers. We look forward to providing more insights into our businesses at our upcoming capital markets day on 6 June.