Interim Management Statement

RNS Number : 2857E

Spirax-Sarco Engineering PLC

09 May 2013

 



 

 

News Release

 

Thursday 9^th May 2013

INTERIM MANAGEMENT STATEMENT

Spirax-Sarco Engineering plc, the world leader in the control and efficient use of steam and in peristaltic pumping, issues the following Interim Management Statement in respect of the period from 1^st January 2013, ahead of its Annual General Meeting ("AGM") today at 2.00pm.

Trading

Global economic conditions remain broadly unchanged since we reported our 2012 results in early March and trading conditions in most of our markets have been similar to the second half of last year: we continue to see reasonably good base business but restrained customer expenditure for more costly plant improvement and energy saving projects.

2013 has started in line with our expectations and ahead of last year.  For the four months ended 30^th April 2013, sales increased by 6%, including a gain of 2% from favourable currency movements as sterling weakened.  We achieved growth in all segments, led by good organic sales growth in Asia Pacific followed by Watson-Marlow.  We saw modest organic sales growth in Europe, Middle East and Africa ("EMEA"), which was encouraging given the difficult economic background.  In the Americas, strong progress in Latin America offset a decline in the US and Canada, where the softness towards the end of 2012 has continued into 2013.

At constant currency, operating profit and margin were comfortably ahead of the comparable period in 2012 reflecting the contribution from higher sales and, importantly, the further cost savings from the restructuring in Europe, net of increased costs from continued investments in market development.  The performance in EMEA was markedly ahead, aided also by favourable currency movements.

Financial position

Our balance sheet remains very strong and the Group's net cash balance increased from £52 million at 31^st December 2012 to £76 million at 30^th April 2013, including £5 million due to more favourable exchange rates.  If approved at the AGM, the final dividend of 37p per share in respect of 2012, totalling £29 million, will be paid on 17^th May 2013 and the special dividend of 100p per share, totalling £78 million, will be paid on 3^rd July 2013.  There has been no material change in the financial position of the Group during the period and the principal risks and uncertainties remain as set out on pages 55 to 59 of the 2012 Annual Report.

Outlook

As noted in previous statements, our markets tend to broadly mirror overall economic activity and industrial production.  We anticipate that low rates of industrial production growth will persist this year in most of our mature markets and that conditions in Europe will remain weak but offset by generally higher rates of industrial output in our emerging markets.  Our focus is on generating our own growth through our strategic priorities of expanding our presence in emerging markets and driving benefits from the increased investment in R&D in recent years, as well as delivering the full-year cost savings of the European restructuring.

Our business is seasonally biased to the second half and we are anticipating a more normal first half/second half profile this year.  Given the Group's robust business model and fundamental strengths, the Board remains confident that the Group will make further progress in 2013.

Spirax Sarco will publish its interim results on 8^th August 2013.

Enquiries:

Mark E Vernon, Chief Executive

David Meredith, Director Finance

Tel:  [phone]

About Spirax Sarco

Spirax-Sarco Engineering plc is the world leader in both steam system management and peristaltic pumping. The Company provides a broad range of fluid control products, engineered packages, site services and systems expertise for its diverse range of over 100,000 industrial and institutional customers. The Company helps its customers to optimise production capacity, reduce energy costs and emissions, improve product quality and enhance the safety of their operations.  Spirax Sarco is headquartered in Cheltenham, England, has strategically located manufacturing plants around the world and employs approximately 4,700 people, of whom around 1,300 are direct sales and service engineers.  Its shares have been listed on the London Stock Exchange since 1959 (symbol: SPX). Further information can be found at www.spiraxsarcoengineering.com 

 

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