Interim Results

Spirax-Sarco Engineering PLC
7 September 2000


                     2000 Interim Results
                               
                                 Six months to 30th June
                                     2000      1999   Change

Turnover                          £133.5m   £126.5m      +6%
Operating profit                   £19.2m    £19.1m      +1%
Operating profit margin             14.4%     15.1%
Profit before taxation *           £18.2m    £18.6m      -2%
Earnings per share *                16.0p     15.3p      +5%
Dividend per share                   5.4p      5.2p      +4%


-   Good underlying performance, offset by impact of weak euro
-   Organic sales up 7%
-   Strong sales and profit growth in Asia
-   Growth in USA and Continental Europe, difficult trading in UK
-   5% EPS growth *

*  Before loss on disposal of fixed assets

Commenting on the results, the Chairman, Tim Fortune, said:
'The results for the first half of 2000 reflect a continuation
of the positive start to the year that was reported in
March...  We are continuing to develop our sales
opportunities, building on the strengths and the reputation of
our businesses and improving efficiency.  We expect that the
growth achieved in the first half will continue in the second
half of 2000, which, assuming that the current world trading
environment does not deteriorate, should give a solid result
for the full year.'



Enquiries:

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

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


The Chairman, Tim Fortune, comments as follows:

The results for the first half of 2000 reflect a continuation
of the positive start to the year that was reported in March.
They represent good progress based upon the underlying
strengths of our niche businesses, which have been operating
in a mixed economic environment and with pressure on some
margins arising from the weak euro.  Stronger business levels
in Asia, the USA, and parts of Continental Europe were
partially offset by weaker demand in the UK.  We continued to
invest in the identified growth opportunities for our steam
related and peristaltic pumping businesses, particularly by
improving the knowledge and service provided to our customers
and extending our product offerings;  these create added value
for our customers which goes beyond pure product
specification.

The first half turnover was £133 million compared with £127
million in the same period in 1999, an increase of 6%.  This
included 0.6% in respect of the acquisition on 10th January of
Alitea, a small Swedish peristaltic pump manufacturer.
Excluding acquisitions, and at constant exchange rates,
organic turnover increased by 7%.

Operating profit increased by 1% to £19.2 million despite
adverse exchange rate effects of £1.25 million, which also
accounted for virtually all of the reduction in the operating
profit margin to 14.4% from 15.1%.  On a like for like basis,
excluding the effects of exchange rates and acquisitions,
operating profits were up 7%.  The charge for amortisation of
goodwill in the first six months of 2000 was £0.2 million,
compared with £0.1 million in the same period last year.
During the period, the sale of the site in Allentown, USA, was
completed for a value of £2.7 million and a loss on disposal
of £0.9 million was incurred.

The net interest charge was £1.0 million, an increase from
£0.5 million in the first half of 1999, due to the extra debt
arising from the continuing share buy-back programme.  Profit
before tax and before the loss on disposal of fixed assets was
£18.2 million, a reduction of £0.4 million on the first half
of last year.  The tax charge was 32% (1999:  33%).  Earnings
per share before the loss on disposal of fixed assets were
16.0p compared with 15.3p last year, an increase of 5%.  After
the loss on disposal of fixed assets, earnings per share were
15.1p.

TRADING

Our focused specialist businesses have a presence worldwide
and serve their customers by providing solutions and technical
support, together with excellent service and product
availability anywhere in the world.  This is usually achieved
by direct contact with customers and by visiting and advising
at their plants.  Customers for Spirax Sarco's steam and
related process control equipment or Watson-Marlow Bredel's
peristaltic pumps are present in virtually all industrial
sectors and vary in size from small companies to the very
large industrial groups.
     
Our sales engineers, of whom there are 800 worldwide, are
equipped to give advice to customers on how to improve plant
efficiency, process repeatability, energy conservation and
quality.  Within our chosen specialties of steam for process
and peristaltic pumping, we are the market leaders and able to
provide the full range of equipment as a single source
supplier to solve our customers' problems.  Electronic
communication is playing an increasingly important part in
supporting our sales engineers with the provision of knowledge
and service to our customers, and we continue to invest in our
commercial communication and web sites.  We also continued the
development of the Spirax Sarco and Watson-Marlow Bredel
ranges, and a number of new products were released during the
first half of 2000 and product alliances have progressed well.
     
Our UK domestic sales operations encountered difficult market
conditions, with the gradual run down of industrial capacity,
attributed partly to the persistent strengthening of sterling,
particularly as against the weak euro.  Although the range of
products and services has been expanded, sales and operating
profits were lower in the first half of 2000.  Our UK Supply
operations benefited from a higher level of demand from our
companies overseas and pursued their ongoing strategy to
reduce costs, including moving material sourcing outside
Europe and improving productivity.
     
Trading conditions in Continental Europe generally improved
during the period, boosted by increasing demand from export
orientated customers, although the project business remained
low.  The Watson-Marlow Bredel companies continued their
overall growth record, and Alitea (acquired on 10th January
2000) performed well, as expected.  In the Spirax Sarco
markets there was growth in turnover in local currency in most
of our European markets, although our French company found
market conditions tough, and the Czech and Slovak economies
were weak.  Our operations in Finland, Norway, Portugal, Spain
and Switzerland all made good sales gains, and the Italian and
German companies started to improve after a tough year in
1999.  Our Supply companies in France, Germany, the
Netherlands and Spain all experienced a good level of demand
and, like the UK factories, are taking actions to reduce total
manufacturing costs.  Overall, the weakness of the euro meant
that the adverse exchange rate effect on turnover from
translation was 9%.  The operating profits in Continental
Europe declined due to the impact of exchange rate movements,
both in respect of products sourced from the UK and on
translation;  at constant exchange rates, operating profits
were up.
     
In the Americas, there was overall growth in turnover and
operating profits.  In North America, our companies in the USA
and Mexico made progress, especially the Watson-Marlow Bredel
sales organisation in the USA, which won some large orders for
shipment in the second half of the year.  Our new factory in
South Carolina continued to improve its delivery performance
and customer service, and contributed an improved profit;  it
is making the progress outlined in March and grew sales in the
first half of 2000.  In South America, operating profits were
down, with the Argentinian economy remaining depressed and
little improvement yet in our market in Brazil.
     
The good improvement in the International markets (those
countries outside Europe and the Americas), which started in
1999, has continued in the first six months of 2000, with
strong growth in sales and profits overall.  Our Korean
company pushed ahead particularly strongly, and our companies
in Australia, Malaysia, New Zealand and Thailand made gains,
as did our Japanese operation, even though the economy
remained weak.  In China, there was good underlying growth,
offset by the non-repeat of a large pharmaceutical order in
1999, and we continued to make a healthy profit.  The
Taiwanese economy does not seem to have recovered from the
after-effects of the earthquake last year and recent political
nervousness;  business remains weak.
     
BALANCE SHEET & CASH FLOW

Capital employed (net assets plus net debt) increased during
the period, reflecting the general increase in business
levels.  Cash inflow from operating activities was £21.3
million (1999:  £18.6 million) and net capital expenditure of
£6.1 million was marginally higher than the first half of last
year.  Net debt increased from £34.8 million to £42.2 million
during the period.  The increase of £7.4 million included £1.9
million in respect of the acquisition of Alitea in January and
a further £2.5 million to purchase 665,000 shares under the
share buy-back programme.  In addition, exchange rate
movements added £2.9 million to net debt.  Net gearing as at
30th June was 31%, compared with 28% at the end of 1999.

DIVIDEND

The Board has declared an interim dividend of 5.4p (1999:
5.2p) per ordinary share, an increase of 4%, which will be
paid on 10th November 2000 to shareholders on the register at
the close of business on 22nd September 2000.  No scrip
alternative to the cash dividend is being offered in respect
of the 2000 interim dividend.

PROSPECTS

We are continuing to develop our sales opportunities, building
on the strengths and the reputation of our businesses and
improving efficiency.  We expect that the growth achieved in
the first half will continue in the second half of 2000,
which, assuming that the current world trading environment
does not deteriorate, should give a solid result for the full
year.


GROUP PROFIT AND LOSS ACCOUNT


                         Six months  Six months    Year ended
                       to 30th Juneto 30th June 31st December
                               2000        1999          1999
                              £'000       £'000         £'000


Turnover                    133,486      126,511       258,942
                            ----------   ----------    -------

Operating profit             19,183      19,083        42,721
Loss on disposal of
fixed assets                  (926)           -             -
                            ------------ ------------  -------

Profit before interest       18,257      19,083        42,721
Net interest payable           (961)       (469)         (970)
                            ------------ ------------  -------

Profit before taxation       17,296      18,614        41,751
Taxation (note 3)            (5,498)     (6,142)      (12,693)
                            ------------ ------------  -------

Profit after taxation        11,798      12,472        29,058
Minority interests - equity   (494)       (439)         (943)
                            ------------ ------------  -------

Attributable profit          11,304      12,033        28,115
Dividends                   (4,028)      (4,031)      (13,102)
                            ------------ ------------  -------

Retained profit               7,276       8,002        15,013
                            ========     ========    ========

Earnings per share (note 4)

before the non-operating 
item                           16.0p      15.3p          36.1p
after the non-operating 
item                           15.1p      15.3p          36.1p

Dividends per share             5.4p        5.2p         17.3p



GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES


                         Six months  Six months    Year ended
                       to 30th Juneto 30th June 31st December
                               2000        1999          1999
                              £'000       £'000         £'000


Profit for the period         11,304      12,033        28,115

Currency translation
difference on foreign
currency net investments      2,976       (400)         (1,857)
                              ----------  ----------    ------


Total recognised gains
and losses relating
to the period                 14,280      11,633        26,258
                              ======      ======        ======


GROUP BALANCE SHEET


                          30th June   30th June 31st December
                               2000        1999          1999
                              £'000       £'000         £'000

Fixed assets
Intangible assets             6,273       4,706         4,484
Tangible assets              85,367      81,613        84,668
                            ------------ ------------  -------
                             91,640      86,319        89,152

Current assets
Stocks                       61,527      56,048        57,799
Debtors                      82,668      80,209        76,884
Cash deposits and short
term investments             16,770      30,580        22,863
Cash at bank and in hand      3,785       5,750         2,345
                            ------------ ------------  -------
                            164,750      172,587       159,891

Creditors
Amounts falling due
within one year             (69,036)     (74,014)      (70,128)
                            ------------ ------------  -------
Net current assets           95,714      98,573        89,763
                            ------------ ------------  -------
Total assets less current
liabilities                 187,354      184,892       178,915

Creditors
Amounts falling due after
more than
one year                    (38,439)     (37,713)      (39,960)

Provisions for liabilities
and charges                 (11,245)     (10,095)      (10,218)
                            ------------ ------------  -------

Net assets                  137,670      137,084       128,737
                            =======      =======       ========

Capital and reserves
Called up share capital      18,648      19,480        18,751
Capital redemption reserve    1,582         678         1,416
Share premium account        32,096      31,156        31,263
Revaluation reserve           4,645       4,535         4,558
Profit and loss account      77,528      78,474        69,775
                            ------------ ------------  -------
Shareholders' funds
- equity                    134,499      134,323       125,763
Minority interests
- equity                      3,171       2,761         2,974
                            ------------ ------------  -------
                            137,670      137,084       128,737
                            =======      =======       ========

GROUP CASH FLOW STATEMENT
                        Six months toSix months to Year ended
                            30th June  30th June31st December
                                 2000       1999         1999
                                £'000      £'000        £'000

Operating profit               19,183     19,083       42,721
Depreciation charges            5,562      5,435       10,571
Increase in stocks             (1,787)    (2,653)      (4,718)
Increase in debtors            (1,821)    (4,583)      (6,549)
Increase in creditors
and provisions                    124      1,327           84
                               ------     ------       -------
Cash flow from operating 
activities                     21,261     18,609       42,109

Net interest paid               (853)      (427)        (875)
Dividends paid by
subsidiary undertakings
 to minority interests          (419)      (196)        (500)
Taxation                       (5,877)    (5,919)      (10,583)
Purchase of tangible
fixed assets                   (9,343)    (5,708)      (15,750)
Sales of tangible
fixed assets                    3,226        185        1,368
Acquisitions                   (1,852)    (1,111)      (1,519)
Equity dividends paid          (9,076)    (9,083)      (13,523)
                               -------    ------        ------

Cash outflow before use of
liquid resources
and financing                  (2,933)    (3,650)         727
Management of
liquid resources                6,423      5,624       12,772
                               ------     ------      -------
                                3,490      1,974       13,499
                               ------     ------      -------
Financing  -
Issue of ordinary
share capital                     897      1,251        1,367
Share buy-back                 (2,478)    (8,373)      (22,604)
Increase in debt                  296     (2,442)       5,119
                               -------    ------        -------               
                               (1,285)    (9,564)      (16,118)
                               ------     ------        -------

Increase/(decrease) in
cash in the period              2,205     (7,590)      (2,619)
                               ========   =======      =======

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

Increase/(decrease)
in cash in the period           2,205     (7,590)      (2,619)
Cash inflow from
increase in debt                (296)      2,442       (5,119)
Cash inflow from
decrease in liquid
resources                      (6,423)    (5,624)      (12,772)
                               ------     -------       -------

Change in net debt
resulting from cash flows      (4,514)    (10,772)     (20,510)
Amortisation of loan expenses    (12)       (12)         (23)
Translation difference         (2,855)       726        1,828
                               ------     ------       -------
Movement in net debt
in the period                  (7,381)    (10,058)     (18,705)
Opening net debt               (34,803)   (16,098)     (16,098)
                               -------     ------       -------               
Closing net debt               (42,184)   (26,156)     (34,803)
                               =======    =======       ======


Notes

1.   Overseas results and cash flows have been translated into
     sterling at average rates of exchange for each period.
     Foreign currency assets and liabilities have been
     translated at period end rates.

2.   In accordance with Financial Reporting Standard 10,
     purchased goodwill arising on consolidation in respect of
     acquisitions since 1st January 1999 has been capitalised
     and is being amortised over 20 years.

3.   Taxation has been estimated at the rate expected to be
     incurred in the full year.

                           Six months  Six months    Year ended
                         to 30th June to 30th June 31st December
                                 2000       1999         1999
                                £'000      £'000        £'000

United Kingdom
corporation tax                 1,245      1,604        3,142
Overseas taxation               4,192      4,290        9,126
Deferred taxation                  20        290          445
Adjustment in respect of
previous years                     41       (42)         (20)
                                ---------- ----------   ------
                                5,498      6,142        12,693
Tax on non-operating item         278          -            -
                                ---------  -----------  ------
                                5,776      6,142        12,693
                                ======     ======       ======

4.   The calculation of earnings per share before the non-
     operating item is based on earnings of £11,952,000 (1999:
     £12,033,000) and the calculation of earnings per share
     after the non-operating item is based on earnings of
     £11,304,000 (1999:  £12,033,000) together with the
     weighted average number of shares in issue during the
     half year of 74,913,269 (1999:  78,687,786).

5.   Capital employed is represented by net assets excluding
     net debt.

6.   This financial information, which is unaudited, does not
     amount to full accounts within the meaning of Section 240
     of the Companies Act 1985 (as amended).  Full accounts
     for 1999 with an unqualified audit report have been filed
     with the Registrar of Companies.

7.   Copies of the Interim Report will be sent on 9th
     September 2000 to members and can be obtained from our
     registered office at Charlton House, Cirencester Road,
     Cheltenham, Gloucestershire GL53 8ER.  From 11th
     September 2000 the Interim Report will be available on
     our website at www.SpiraxSarcoEngineering.com.