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Spirax-Sarco Engineering PLC

Spirax-Sarco Engineering PLC Strong first half organic growth; full year expectations unchanged

Spirax-Sarco Engineering PLC (LON:SPX) today announced their 2019 Half-Year result for the six months ended 30th June.


Adjusted operating profit*£129.2m£125.7m+3%+4%
Adjusted operating profit margin*21.9%23.0%-110 bps            -70 bps
Adjusted profit before taxation*£124.6m£120.6m+3% 
Adjusted basic earnings per share*120.0p119.2p+1% 
Dividend per share32.0p29.0p+10% 
Adjusted cash conversion**71%75%  
Operating profit£112.7m£111.9m+1%
Operating profit margin19.1%20.4%-130 bps
Profit before taxation£108.1m£106.8m+1%
Basic earnings per share102.4p105.1p-3% 

*All profit measures exclude certain items which totalled £16.5 million for the six months ended 30th June 2019, as set out in Note 2.

**Cash conversion measures the percentage of adjusted cash from operations to adjusted operating profit, as set out in Note 2.

⁺ Organic percentage growth measures are at constant currency and exclude contributions from acquisitions and disposals. 

  • Revenue up 8% organically and at reported rates
  • Adjusted operating profit margin of 21.9% in line with expectations
  • Strong organic sales and profit growth in Steam Specialties and Watson-Marlow
  • Continued organic sales growth in Chromalox; addressing unsatisfactory profitability
  • Acquisition of Thermocoax for £135 million in May 2019
  • Net debt of £391.5 million, 1.3x EBITDA
  • Interim dividend increased by 10% to 32.0p

Nicholas Anderson, Group Chief Executive of Spirax-Sarco Engineering PLC, commenting on the results said:

“We are pleased to report strong organic sales growth of 8% in the first half of the year and organic operating profit growth of 4%, with all three businesses delivering organic sales growth ahead of industrial production.  Both the Steam Specialties and Watson-Marlow businesses achieved strong organic sales growth and margin progression, reflecting the successful implementation of our strategy and its focus on self-generated growth.  Chromalox also grew sales organically against a very tough comparison.

The only disappointment of this period was a profitability deterioration in Chromalox so we have intensified work to improve its operational performance.  Our original expectations for this business remain unchanged.  While the Group’s strong first half organic sales growth was ahead of our expectations, industrial production growth forecasts for the second half of the year have weakened below earlier estimates.  As a result, our overall full year expectations remain unchanged.”

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