Final Results - Year Ended 31 December 1999

Spirax-Sarco Engineering PLC
13 March 2000


                 1999 PRELIMINARY ANNOUNCEMENT
                               
                          HIGHLIGHTS
                               
                                    1999      1998     Change

Turnover                         £258.9m   £249.0m       +4%

Operating profit                  £42.7m    £42.4m       +1%

Operating profit margin            16.5%     17.0%

Profit before tax                 £41.8m    £42.3m      (1%)

Earnings per share                 36.1p     34.5p       +5%

Dividends per share                17.3p     16.5p       +5%

Gearing                            27.7%     12.0%


1998 comparatives are stated before an exceptional item


Stronger results in the second half of 1999
Good underlying performance.
Lower profits in the USA following the factory move but
real progress being made.
Good sales and profit recovery in Asia.
EPS growth, enhanced by share buy-back.

Enquiries:

Tim Fortune     -   Chairman
Marcus Steel    -   Chief Executive
David Meredith  -   Director Finance

Tel: [phone] at Citigate Dewe Rogerson until 6.00 p.m.


                 SPIRAX-SARCO ENGINEERING plc
                      PRELIMINARY RESULTS
                               
SUMMARY

The Chairman, Tim Fortune, says:

'In 1999 we saw the start of a recovery in Asian and Far
Eastern markets,  steady progress in the industrial markets of
North America and slow markets in Europe generally.  We had a
stronger result in the second half of 1999, with higher growth
of sales and profits over the second half of 1998 than in the
first half year.  Operating profits at £42.7 million were
marginally up on 1998 (pre-exceptional), most notably in
Korea, China, Brazil and Watson-Marlow Bredel USA.  Profits
were significantly lower in the Spirax Sarco operation in
South Carolina, USA, where additional costs were incurred in
restoring the service to the market following our factory
move.  Excluding Spirax Sarco, Inc., the operating profits of
the Group increased by 7% in 1999.  Our focus on the steam and
peristaltic pump markets and our wide customer base have
allowed us to increase our sales during 1999, and we have many
opportunities to broaden our product offering, to continue to
improve the way we operate through IT and internet
applications, and to strengthen our approach in selected
market areas.  We continue to pursue these actively.

Following the stronger second half year, the turnover for the
Group in the full year was £258.9 million, which compares with
£249.0 million in 1998, an increase of 4%, mainly due to a
good recovery in sales in Asia from the depressed 1998 levels.
A small 1% contribution to sales growth from acquisitions was
matched by a similar disbenefit from exchange rate movements.

The operating profit for the year was £42.7 million, which
represents an increase of 1% on the 1998 pre-exceptional
profit of £42.4 million (£32.3 million after exceptional items
relating to the factory move in the USA).  The effect of
exchange rate movements on the 1999 profit was small.  The
Group's operating profit margin at 16.5% remained at a healthy
level in 1999 and compares with 17.0% in 1998.'

The Chief Executive, Marcus Steel, reports:-

TRADING

The world economic background against which the Group has been
operating in 1999 has been somewhat mixed, with a distinct
recovery in several of the Asian markets, steady North
American markets for industrial products, weakness in the
South American markets, particularly following the devaluation
of the Brazilian Real, and, finally, slow demand overall in
Europe, which was disappointing following the good results in
1998.  During 1999 there were signs of improvements in the
overall business climate, and the second half of the year was
stronger than the first half, in terms of both sales and
profits.  The effect of exchange rate movements on profits in
1999 was small, with more favourable US and Asian exchange
rates being offset by a weaker Euro.


The operating profit of £42.7 million for 1999 is slightly
ahead of the pre-exceptional 1998 figure.  As explained at the
interim stage, we have incurred significant expense in Spirax
Sarco, Inc. in order to mitigate the delays in bringing the
rate of production in our new factory up to the required
level;  this more than accounts for the reduction in the
Group's operating profit margin from 17.0% in 1998 to 16.5% in
1999.  Excluding Spirax Sarco, Inc. the operating profits of
the Group grew by 7% in 1999.

United Kingdom

The UK selling operations of Spirax Sarco and Watson-Marlow
Bredel experienced difficult trading conditions, although
there were a number of good projects in the second half and
operating profits were maintained. Shipments and operating
profits in the Spirax Sarco UK Supply organisation were also
maintained during the year.  These factories supply
approximately a third of products sold by the Group worldwide.
Lower demand from Europe was offset by a recovery in demand
from Asia.  There were continuing investments in new plant
which contributed towards productivity gains in the UK
factories.  Both Spirax Sarco and Watson-Marlow Bredel also
made good progress in developing and releasing new products
during the year.  We increased investment in the development
of IT systems for the Group and in marketing opportunities.
The overall UK operating profit of £12.5 million was broadly
unchanged from the 1998 figure of £12.7 million.

Continental Europe

Sales in 1999 in Continental Europe were flat as the markets
remained sluggish.  Spirax Sarco sales and profits declined in
a number of markets, particularly in Germany and Italy, where
the economic climate was depressed, and where some of the
export-led customers, such as OEMs, were suffering.  The
French selling company achieved a small improvement in sales,
including the acquisition in April 1999 of Byvap Technology
S.A.S., a small steam trap manufacturer.  Hygromatik, our
steam humidifier company, continued its record of good growth
both in Germany and in other markets around the world.  The
French manufacturing company came close to matching its strong
1998 performance;  lower demand from Europe being partially
offset by transfer of production from Italy and increased
demand from the Americas.  Hydra, our Spanish safety valve
manufacturer, had a good year.  Its range of safety valves is
now being sold across the Group and it is performing in line
with our original projections at the time of acquisition
eighteen months ago.

Against the generally slow background in Europe, there was
growth in a number of markets, particularly the Spirax Sarco
companies in Poland, Belgium, Norway and Sweden, and the
Watson-Marlow Bredel companies in France, Germany and Italy.

On 10th January 2000, Watson-Marlow Bredel completed the
acquisition of Alitea, a Swedish manufacturer of specialist
peristaltic pumps, for £1.9 million.  This acquisition
substantially widens our OEM/high precision product range and
trading in early 2000 by Alitea has been good.

The mixed results of our operations across Continental Europe
finished with a 7% reduction in operating profits, from £16.2
million to £15.0 million in 1999, although about half of the
profit reduction was due to the impact of exchange rate
movements and, in particular, the weakness of the Euro.

Americas

Sales in the Americas were up 2% and operating profits
declined from £8.9 million (before the exceptional item) to
£7.3 million.  In South America, both the Argentinian and
Brazilian domestic markets were adversely affected by the
devaluation of the Brazilian Real in January 1999.  The
Argentinian company's results were helped by increased demand
from the rest of the Group for ball valves.  In spite of the
devaluation of the Real, the Brazilian company succeeded in
protecting its local currency sales and substantially
improving its profits, helped by extra business from the USA.
Our Canadian company had a good result in 1999 and our Mexican
company performed well considering the depressed state of the
economy.

In the USA, as explained at the interim stage, the costs of
establishing our new operation in South Carolina continued to
impact profits of Spirax Sarco, Inc., which were significantly
below their pre-exceptional 1998 level.  Despite the generally
flat industrial valve market, our own domestic sales moved
ahead in the second half of 1999, and, with further
improvements in product availability and customer service, we
expect this trend to continue in 2000.  We are also confident
that through our investments in plant and resource, costs will
be reduced and we will see real profit improvement in 2000.
We are past the low point and our drive continues towards
completing the creation of a more responsive and competitive
company in the USA, which will strengthen our ability to
realise the enormous potential for growth in what is the
world's largest market for our products.

The Watson-Marlow Bredel sales company in the USA had an
excellent year with a significant increase in sales and
profits resulting from increased market penetration.

International (markets outside Europe and the Americas)

Following the difficult trading conditions experienced in
1998, the International companies benefited from a recovery in
confidence and demand in many of the Asian markets, and the
results were assisted by the strengthening of a number of the
Asian currencies against sterling during 1999.  We were
confident that the Asian economic setback was temporary and
therefore maintained our sales infrastructure, and the result
has been an excellent increase in sales in the region, where
profits rose 71% from £4.6 million to £7.9 million.  Our
Korean company produced a good improvement in turnover and
profits, building on the tough decisions taken in 1998 to
protect the profit.  Our Chinese company, which is relatively
new, continued to grow strongly, including some exceptionally
large projects, as we took on more sales engineers;  the new
factory in China increased production and has widened the
range of products that it is manufacturing.  We also made good
progress in the Indian, Thai and Taiwanese markets.  The
Japanese, Malaysian and Australian economies were, however,
all somewhat depressed which was reflected in the results of
our operations in those countries.  Watson-Marlow Bredel sales
in the International region improved during 1999 and
contributed to the good results of the Watson-Marlow Bredel
organisation as a whole.

FINANCIAL, EPS & DIVIDENDS

Net interest payable was £1.0 million (1998:  £0.2 million),
the increase arises from the extra debt associated with the
share buy-back.  Profit before tax was therefore £41.8 million
and compares with £42.3 million in 1998 (£30.6 million after
the exceptional item).

The tax charge in 1999 was 30.4%, which compares with a pre-
exceptional tax charge in 1998 of 32.7%.  Earnings per share
were 36.1p, which is an increase of 5% compared with the pre-
exceptional 34.5p in 1998, (24.1p after the exceptional item).
The Board has decided to recommend a final dividend of 12.1p
per share, which, together with the interim dividend of 5.2p
per share, makes a total dividend for the year of 17.3p per
share.  This compares with a total dividend of 16.5p per share
in 1998, an increase of 5%.  The total dividend cost is £13.1
million and is covered 2.1 times by earnings.


SHARE BUY-BACK

In October 1998, we announced that, in order to improve the
efficiency of our balance sheet, we would buy back in the
market up to 5% of the issued shares of the company.  In
November 1999 we announced the intention to buy back a further
5%, and this latter programme was only partially completed
before the end of the year.  During 1999, 4,505,032 shares
were purchased and cancelled for a total consideration of
£22.6 million (including costs), at an average price of 498.2p
per share.  The total shares bought back in both years
represent 7.1% of the shares in issue.  Consistent with this
policy, no scrip alternative to the cash dividend will be
offered.

CAPITAL EXPENDITURE & CASH FLOW

Investment in fixed assets of £15.7 million was 50% above
depreciation, reflecting our commitment to improve efficiency
in our manufacturing operations through the purchase of the
latest flexible CNC equipment.  In addition, investment in IT
systems also increased to improve operational efficiency and
to ensure that the millennium date change did not cause any
problems.

The Group's solid underlying cash flow continued in 1999,
although net debt increased by £18.7 million to £34.8 million
during 1999 due to the share buy-back.  Net gearing at 31st
December 1999 was 28% (1998:  12%) and interest was covered
forty-four times.

LOOKING FORWARD

There is excellent potential for our Spirax Sarco business to
grow.  Although we are the largest individual supplier to the
steam using market, we still have a relatively small share of
the available market.  We are unique, firstly, in that we
offer a wider range of products than other suppliers for the
steam and condensate loop, and, secondly, in our knowledge of
steam technology and our ability to advise customers worldwide
through our large and experienced direct sales team.

We are building on these assets and steadily increasing our
sales coverage in those markets offering the best
opportunities, including the USA, Germany and Japan.  We will
continue to set up our own sales companies where a market
justifies the investment;  in future these may include Eastern
Europe, the Middle East, Indo-China and eventually Russia.  We
are continuing to expand our ranges of products, particularly
in the area of controls, safety valves, boilerhouse and
metering products.  In addition, some of the world's
regulatory changes and climate levy impositions will boost our
ability to deliver benefits to customers.  The increasing use
of Combined Heat and Power plants presents an opportunity for
Spirax and will lead to the need for more high pressure
products.  We have plans to increase our presence in market
segments where we have identified potential to grow our market
share;  these include OEMs, Oil and Petrochemicals,
contractors, the clean steam market (such as food,
pharmaceuticals, biotechnology) and parts of the process
control market which are close to the steam system.  The
continuing trend of outsourcing of engineering and support by
some customers is opening up a good opportunity for Spirax
Sarco to provide a range of steam management services, and
modular engineered solutions.  The electronic communication
and e-commerce revolution will enhance our business, which has
always been based on talking directly with end users.  We are
investing in this as we see the use of internet technology as
greatly helping our marketing and sales, both when we deal
with customers, and internally to improve our sales engineer's
knowledge in front of the customer.

In Watson-Marlow Bredel there has been excellent growth since
we acquired the original Watson-Marlow business in 1990.  We
expect to extend the record with three main thrusts, firstly,
by continuing the up-grading and replacing of the existing
range of pumps with new models employing improved designs,
performance and reduced costs.  Secondly, we will add to the
current range in order to improve coverage of specialist
applications;  the acquisition of Alitea in January 2000
achieved this for precision OEM applications.  Thirdly, we
will continue the conversion of pump users to the peristaltic
principle, which effectively leads to steady growth of the
market in which Watson-Marlow Bredel operates.

Many factors will contribute to the continued growth of our
two businesses in the medium and long term.  Some will be
developed within the Group, and some will be achieved, as in
the past, by acquisition when suitable companies are available
and meet our stringent criteria.


PROSPECTS

The Chairman comments as follows:-

There is good potential for the Spirax Sarco and Watson-Marlow
Bredel businesses to grow through the increase of both
geographical and product market share.  Sales increased in the
second half of 1999, and 2000 has started positively.  Given
continuation of the recent trading environment, we would
expect to see good growth in 2000 by building on our technical
and commercial strengths,  from the resilience of our steam
and peristaltic pump businesses, through progress in the USA
and by capitalising on our recent investments.


                 SPIRAX-SARCO ENGINEERING plc
                               
The audited trading results for the Group for the year ended
31st December 1999 (together with the comparative figures for
1998) are set out below:-

                                 1999    1998      1998    1998
                                       Before    Except-   After
                                      except-    ionalitem except-
                                     ional item  (note 4)   ional item
                                £'000   £'000    £'000      £'000

Turnover                      258,942  249,030     -       249,030
Operating costs             (216,221) (206,597) (10,150)  (216,747)
                               -
Operating profit               42,721   42,433  (10,150)    32,283
Provision for loss on 
disposal of fixed assets      -          -       (1,479)    (1,479)
                               
Profit before interest         42,721   42,433  (11,629)    30,804
Net interest payable            (970)    (163)     -          (163)
                               
Profit on ordinary activities 
before taxation                41,751  42,270   (11,629)    30,641
Taxation on profit on 
ordinary activities           (12,693)  (13,805)  3,304   (10,501)
                              
Profit on ordinary activities 
after taxation                 29,058   28,465   (8,325)    20,140
Minority interests - equity     (943)    (917)     -      (917)
                               
Profit for the financial year  28,115   27,548   (8,325)    19,223
Dividends                     (13,102) (13,116)     -      (13,116)
                               
Retained profit for the 
financial year                 15,013   14,432   (8,325)     6,107
                               

Earnings per share              36.1p    34.5p     -     24.1p
Earnings per share (diluted)    36.0p    34.4p     -     24.0p
Dividends per share             17.3p    16.5p     -     16.5p


                 SPIRAX-SARCO ENGINEERING plc
                               
         Group Balance Sheet as at 31st December 1999

                                         1999      1998
                                        £'000     £'000
Fixed assets
Intangible assets                       4,484     4,404
Tangible assets                        84,668    81,067
                                      
                                       89,152    85,471
Current assets
Stocks                                 57,799    53,561
Debtors                                76,884    76,186
Cash deposits and short
  term investments                     22,863    36,441
Cash at bank and in hand                2,345     5,102
                                      
                                      159,891   171,290

Creditors
Amounts falling due within one year   (70,128)  (69,743)
                                      
Net current assets                     89,763   101,547
                                      
Total assets less current liabilities 178,915   187,018

Creditors
Amounts falling due after more 
than one year                        (39,960)  (40,995)

Provisions for liabilities 
and charges                          (10,218)    (9,827)
                                      
Net assets                            128,737   136,196

Capital and reserves
Called up share capital                18,751    19,791
Capital redemption reserve              1,416       290
Share premium account                  31,263    29,982
Revaluation reserve                     4,558     4,520
Profit and loss account                69,775    79,261
                                     
Shareholders' funds - equity          125,763   133,844
Minority interests - equity             2,974     2,352
                                      
                                      128,737   136,196
                                      
                               
                                                          
                 SPIRAX-SARCO ENGINEERING plc
  Group Cash Flow Statement for the year ended 31st December
                             1999

                                              1999      1998
                                             £'000     £'000

RECONCILIATION OF OPERATING PROFIT TO OPERATING
CASH FLOWS
Operating profit                            42,721    32,283
Depreciation charges                        10,571    10,498
Increase in stocks                         (4,718)     1,020
Increase in debtors                        (6,549)       580
Increase in creditors and provisions            84   (5,411)
                                           
Cash flow from operating activities         42,109    38,970
                                           
GROUP CASH FLOW STATEMENT
Cash flow from operating activities         42,109    38,970
Returns on investments and 
servicing of finance                        (1,375)     (668)
Taxation                                   (10,583)  (13,664)
Capital expenditure                        (14,382)  (16,392)
Acquisitions                               (1,519)    5,432)
Equity dividends paid                      (13,523)  (8,797)
                                           
Cash inflow before use of liquid 
resources and financing                        727    (5,983)
Management of liquid resources               12,772     360
                                          
                                             13,499   (5,623)
                                          
Financing - 
Issue of ordinary share capital               1,367     1,322
Share buy-back                              (22,604)   (6,142)
Increase in debt                              5,119     3,757
                                           
                                            (16,118)   (1,063)
                                          
Decrease in cash in the period              (2,619)    (6,686)
                                           

RECONCILIATION OF NET CASH FLOW TO MOVEMENT
IN NET DEBT
Decrease in cash in the period             (2,619)   (6,686)
Cash inflow from increase in debt          (5,119)   (3,757)
Cash inflow from decrease in 
liquid resources                          (12,772)     (360)
                                           
Change in net debt resulting 
from cash flows                           (20,510)  (10,803)
Realised gain on gilt                           -        18
Amortisation of loan expenses                 (23)      (23)
Translation difference                       1,828   (1,652)
                                           
Movement in net debt in the period         (18,705) (12,460)
Net debt at 1st January 1999               (16,098)  (3,638)
                                          
Net debt at 31st December 1999             (34,803)  (16,098)
                                           
                               
                               
                 SPIRAX-SARCO ENGINEERING plc
     Group Statement of Total Recognised Gains and Losses
             for the year ended 31st December 1999


                                              1999      1998
                                             £'000     £'000

Profit for the financial year                28,115    19,223

Currency translation differences on foreign
currency net investments                     (1,857)    2,116
                                             

Total recognised gains and losses relating
to the year                                  26,258    21,339
                                             


                               
                 SPIRAX-SARCO ENGINEERING plc
      Group Movement in Shareholders' Funds for the year
                   ended 31st December 1999
                               
                               
                                              1999      1998
                                             £'000     £'000

Shareholders' funds at 1st January         133,844   126,498
Profit for the financial year               28,115    19,223
Dividends                                 (13,102)  (13,116)
Scrip dividend adjustment                        -     3,943
Share buy-back                            (22,604)   (6,142)
Net proceeds of issue of shares              1,367     1,322
Currency translation differences           (1,857)     2,116
                                       
Shareholders' funds at 31st December       125,763   133,844
                                           


Notes:

1.   Foreign currency assets and liabilities are translated
     into sterling at rates of exchange ruling at 31st
     December.  Trading results of overseas subsidiary
     undertakings have been translated into sterling at
     average rates of exchange ruling during the year.

2.   The analysis of turnover by reference to the geographical
     location of customers is as follows:-
                                         1999      1998
                                        £'000     £'000

     United Kingdom                    38,242    37,812
     Continental Europe                94,332    96,473
     The Americas                      72,755    70,794
     Asia, Australasia and Africa      53,613    43,951
                                      
                                      258,942   249,030
                                     

     and by reference to the geographical location of the
     Group's operations is as follows:-
                                         1999      1998
                                        £'000     £'000

     United Kingdom                    81,540    78,666
     Continental Europe               110,162   111,208
     The Americas                      77,721    76,217
     Asia, Australasia and Africa      47,605    38,447
                                      
                                      317,028   304,538
     Inter-segment sales              (58,086)  (55,508)
                                      
     Sales to third parties           258,942   249,030
                                      
3.   Operating profit, analysed by reference to the
     geographical location of the Group's operations, is as
     follows:-
                                    1999      1998      1998
                                            Before     After
                                         exceptional exceptional
                                              item      item
                                   £'000     £'000     £'000

     United Kingdom               12,464    12,657    12,657
     Continental Europe           14,986    16,182    16,182
     The Americas                  7,326     8,947   (1,203)
     Asia, Australasia and Africa  7,945    4,647     4,647
                              
                                  42,721    42,433    32,283
                                 

4.   The exceptional item charged in 1998 was in respect of
     the closure of the Group's facility in Pennsylvania, USA and
     the relocation and start-up of a new facility in South
     Carolina.


5.   Net interest payable:-
                                         1999      1998
                                        £'000     £'000
     Interest payable:
        Bank loans and overdrafts       2,159     2,487
        Other loans                       916       865
                                      
                                        3,075     3,352
     Interest receivable               (2,105)   (3,189)
                                     
                                          970       163
                                      
6.   Taxation:-
                                         1999      1998
                                        £'000     £'000

     United Kingdom corporation tax     7,162     8,529
     Deduct double taxation relief     (4,020)   (4,541)
                                       
                                        3,142     3,988
     Overseas taxation                  9,126     6,809
     Deferred taxation                    445     (274)
                                        
                                       12,713    10,523
     Adjustment in respect of 
previous years                            (20)     (22)
                                        
                                       12,693    10,501
                                        

7.   The calculation of earnings per share before the
     exceptional item is based on earnings of £28,115,000
     (1998:  £27,548,000) and the calculation of earnings per
     share after the exceptional item is based on earnings of
     £28,115,000 (1998:  £19,223,000), as shown in the Group
     profit and loss account, divided by the weighted average
     number of shares in issue during the year of 77,934,804
     (1998:  79,854,550).  The calculation of earnings per
     share (diluted) before and after the exceptional item is
     based on the earnings shown above and the weighted
     average number of shares in issue diluted by 126,196
     (1998:  319,032) to 78,061,000 (1998:  80,173,582).

8.   If approved at the annual general meeting on 27th April
     2000, the final dividend will be paid on 16th May 2000 to
     shareholders on the register at 24th March 2000.


9.   The analysis of net assets by reference to the
     geographical location of the Group's operations is as
     follows:-
                                         1999      1998
                                        £'000     £'000

     United Kingdom                    45,182    40,982
     Continental Europe                39,956    42,806
     The Americas                      48,555    45,596
     Asia, Australasia and Africa      32,192    28,012
                                      
                                      165,885   157,396
     Cash at bank and in hand         (2,345)   (5,102)
                                      
     Capital employed                 163,540   152,294
     Net debt                         (34,803)  (16,098)
                                      
     Net assets                       128,737   136,196
                                      

     Return on capital employed is based on operating profit
     before deducting goodwill amortisation of £241,000 (1998:
     £93,000) and the exceptional item in 1998, and average
     net assets as shown above excluding net goodwill of
     £4,484,000 (1998:   £4,404,000) and net debt.

10.  Analysis of changes in net debt.

                    1st Jan.   Cash   Other Exchange31st  Dec.
                        1999    Flow   non-cash  movement 1999
                                    changes
                       £'000   £'000  £'000    £'000     £'000

Cash in hand and 
at bank                5,102  (2,619)     -    (138)     2,345
Overdrafts           (14,324) (6,096)     -      303  (20,117)
                               
                              (8,715)
                               
Debt due within a year (2,278) 2,278      -        -         -
Debt due beyond a year(40,869)(1,418)   (23)   2,475    (39,835)
Finance leases         (170)     117      -      (6)      (59)
                               
                                 977
                               
Current asset 
investments           36,441  (12,772)    -    (806)     22,863
                                                         
Total                (16,098) (20,510)  (23)  1,828     (34,803)
                       

11.  The financial information set out above does not
     constitute the company's statutory accounts for the years
     ended 31st December 1999 or 1998 but is derived from
     those accounts.  Statutory accounts for 1998 have been
     delivered to the registrar of companies, and those for
     1999 will be delivered following the company's annual
     general meeting.  The auditors have reported on those
     accounts, their reports were unqualified and did not
     contain statements under section 237 (2) or (3) of the
     Companies Act 1985.