Spirax-Sarco Engineering PLC AGM Statement - Trading Update (0291O)
15 May 2018 - 4:00PM
UK Regulatory
TIDMSPX
RNS Number : 0291O
Spirax-Sarco Engineering PLC
15 May 2018
News Release
Tuesday 15(th) May 2018
AGM Statement - TRADING UPDATE
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 30(th)
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.
Trading
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 30(th) April 2018 net debt was GBP345
million. There has been no material change in the financial
position of the Group during the period.
Outlook
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 8(th) August 2018.
Enquiries:
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 Spirax--Sarco Engineering plc
Spirax--Sarco Engineering plc comprises two world--leading
businesses, Spirax Sarco for steam and electrical thermal energy
solutions and Watson--Marlow 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. Watson--Marlow 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).
Further information can be found at
www.spiraxsarcoengineering.com
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