AGM Statement - Trading Update

RNS Number : 0291O
Spirax-Sarco Engineering PLC
15 May 2018



News Release


Tuesday 15th May 2018


Overall expectations unchanged, acquisitions continue to perform in line with plan


Spirax-Sarco Engineering plc, the world leader in the control and efficient use of steam, electrical thermal energy solutions and peristaltic pumping and associated fluid path technologies, issues the following trading update in respect of the period ended 30th April 2018. 


Economic environment

The global macro-economic environment for the Group remains positive with global Industrial Production (IP) growth for 2018 forecast to be very similar to that achieved in 2017.



In line with the macro-economic environment and as anticipated at the time of our preliminary announcement in March, organic* sales growth for the Group in the first four months of the year has been very similar to the first four months of 2017 for both the Steam Specialties and Watson-Marlow businesses.  Within the Steam Specialties business we have seen improved growth in the Americas, while growth has been lower in Asia Pacific and EMEA, albeit both segments had a very strong start to the year in 2017.  Watson-Marlow continues to see growth in EMEA, Asia Pacific and the Americas.


The integration of the two acquisitions made in 2017, Gestra which was acquired in May and Chromalox which joined the Group in July, is progressing to schedule and the businesses continue to perform in line with their respective acquisition plans.


As expected, the currency tailwind that we experienced in the last two years has become a headwind in the current year.  Since the announcement of our preliminary results in March, sterling has strengthened slightly against the basket of currencies we trade in.  If April's foreign exchange rates were to continue for the rest of the year we would expect to see a reduction in sales and profits due to currency movements of 3% and 5% respectively.  Movements in exchange rates are often volatile and unpredictable, therefore the actual impact could be significantly different.


On an organic, constant currency basis, Group operating profit is ahead of the comparable four-month period in 2017 and we continue to prioritise investments for growth over further margin expansion.



Financial position

Our business remains highly cash generative and we maintain a strong balance sheet.  At 30th April 2018 net debt was £345 million.  There has been no material change in the financial position of the Group during the period.




We have good diversification across market sectors and geographic regions, and remain focused on the rigorous implementation of our strategies for growth.  While, as normal, our short order book continues to provide only limited visibility, the Group's fundamental strengths stand us in good stead to continue to deliver growth that outperforms our markets. 


Organic sales growth in the first four months has been very much as anticipated and is consistent with that experienced in the same period in the prior year.  With forecasts for Industrial Production growth rates for 2018 also similar to those seen in 2017 our overall expectations of organic growth and trading margins for the full-year are unchanged to those set out in our preliminary announcement in March.  Provided there is no material deterioration in trading conditions the Board has confidence that the Group will make further progress in 2018.


Spirax-Sarco Engineering plc expects to publish its 2018 half-year results on Wednesday 8th August 2018.



Nicholas Anderson, Chief Executive

Kevin Boyd, Group Finance Director

Tel:  01242 535234



* References to organic changes are excluding acquisitions and disposals, and are expressed at constant currency.

References to profit are to adjusted profit that excludes the amortisation and impairment of acquisition-related intangible assets and acquisition and disposal costs, together with the tax effects of these items.


About SpiraxSarco Engineering plc

SpiraxSarco Engineering plc comprises two worldleading businesses, Spirax Sarco for steam and electrical thermal energy solutions and WatsonMarlow Fluid Technology Group for niche peristaltic pumps and associated fluid path technologies.  Spirax Sarco provides a broad range of fluid control and electrical process heating products, engineered packages, site services and systems expertise for a diverse range of industrial and institutional customers.  The business helps its end users to improve production efficiency, reduce energy costs, water usage and emissions, improve product quality and enhance the safety of their operations.  WatsonMarlow Fluid Technology Group offers the ideal solution for a wide variety of demanding fluid path applications with highly accurate, controllable and virtually maintenance free pumps and associated technologies.  The Group is headquartered in Cheltenham, England, has strategically located manufacturing plants around the world and employs over 7,250 people, of whom approximately 1,600 are direct sales and service engineers.  Its shares have been listed on the London Stock Exchange since 1959 (symbol: SPX).


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