Interim Management Statement

RNS Number : 4096W
Spirax-Sarco Engineering PLC
07 November 2014


News Release


Friday 7th November 2014


Continued good performance in challenging markets


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 1st July 2014 to 6th November 2014.



In the four-month period ended 31st October 2014, organic sales growth was 5%.  The profile of growth across our four segments has remained largely consistent with the first half.  Watson-Marlow has again performed well with growth accelerating since June in emerging markets and North America, and with a continuing good contribution from Bio Pure that was acquired at the start of the year.  In our steam specialties business, in Europe, Middle East and Africa ("EMEA") organic growth has continued at the same pace as in the first half year.  In Asia Pacific, as expected when we last reported in August, we have started to reduce the high level of order book and expect further progress in reducing this order book over the remainder of this year in line with the traditional pattern in the fourth quarter.  Finally in the Americas, sales growth in the four months to October improved due to Latin America.


In the four month period ended 31st October 2014, Group operating profit at constant currency was ahead of the comparable period in 2013.  For the ten months to October 2014, the Group operating profit margin remained ahead on both a constant currency and reported basis, despite persistent exchange rate headwinds.  If current exchange rates prevail for the remainder of the year, we now expect that sales for 2014 will be reduced by 6.3% on translation compared with full-year 2013 average exchange rates.  The impact on operating profit continues to be somewhat greater, at an estimated 10% for the year, reflecting the same additional exchange transaction effects previously indicated.


Financial position

The Group remains highly cash generative and maintains a strong balance sheet, with the net cash balance increasing from £16 million at 31st December 2013 to £35 million at 31st October 2014, despite the £9 million outflow in respect of the acquisition of Bio Pure in January and the adverse impact of currency movements on translation of cash balances.  The interim dividend of 19.5p per share (total cost £15 million) will be paid today.  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 26 and 27 of the 2013 Annual Report.



Steam is widely used across a diverse range of industries and our markets generally reflect the pace of growth in Industrial Production, which our markets typically lag by a few quarters.  The up-tick in global Industrial Production seen since late 2013 has begun to reverse and recent economic indicators point to lower rates of growth in both developed and emerging markets, particularly China.  We remain focused on taking actions to out-perform our markets by generating our own growth through the implementation of our strategic growth initiatives and we will continue to focus on costs.  Our business is resilient and we remain well placed if economic conditions deteriorate.  We have a powerful direct-sales business model, with a wide geographic spread, diverse industrial end markets, a broad customer base and with a large proportion of our revenues deriving from customers' maintenance and operating spend.  Our order book remains at a relatively high level, which is supportive of our expectation for sales growth in the remainder of the year and underpins the Board's confidence that we will make further progress in 2014.





Nick Anderson, Chief Executive

David Meredith, Director Finance

Tel:  01242 535234


Note:  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 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 

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