TIDMSPX
RNS Number : 0329Z
Spirax-Sarco Engineering PLC
15 May 2019
News Release
Wednesday 15(th) May 2019
AGM Statement - TRADING UPDATE
Strong start to the year, despite weakening Industrial
Production growth forecasts. Overall expectations unchanged.
Thermal energy management and niche pumping specialist,
Spirax-Sarco Engineering plc, issues the following trading update
in respect of the period ended 30(th) April 2019.
Economic environment
As expected, the global macro-economic environment continues to
weaken with the latest forecast for global Industrial Production
growth for 2019 being 2.0%, compared to 2.6% at the time of our
preliminary announcement and 3.1% in 2018.
Trading
Despite the softening macro-economic environment, organic* sales
growth for the Group in the first four months of the year remained
at similar levels to the second half of 2018. Growth in Asia
Pacific has been particularly strong, aided by large one-off
projects and customer requests to pull forward sales ahead of the
recent changes to VAT in China. In EMEA we have seen a modest
benefit from customers building buffer stocks ahead of the UK's
anticipated exit from the European Union on 29(th) March, while the
Americas saw similar levels of growth to the prior year. Sales
growth in Chromalox, while positive, was lower than the Steam
Specialties business, albeit against a robust period of growth in
the prior year. Watson-Marlow had an excellent start to the year
helped by healthy growth in its Biopharmaceutical sector.
Sterling exchange rates against the basket of currencies we
trade in have remained very close to the average for the prior
year, resulting in a negligible impact from foreign exchange in the
period.
On an organic basis, Group operating profit is ahead of the
comparable four-month period in 2018, with operating margins
consistent with our full-year expectations.
Financial position
Our business remains highly cash generative and we maintain a
strong balance sheet. At 30(th) April 2019 net debt was GBP203
million. There has been no material change in the financial
position of the Group during the period.
Acquisition
On 13(th) May 2019 we announced the completion of the EUR158
million acquisition of Thermocoax, following the granting of
regulatory approvals in France, Germany and the USA.
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 provides only limited visibility, the Group's
fundamental strengths stand us in good stead to continue to deliver
growth that outperforms our markets.
While organic sales growth in the first four months of the year
has been strong, the lowering of forecasts for Industrial
Production growth rates for 2019 mean that 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.
If current exchange rates were to prevail for the remainder of
the year there would be no material impact of translation or
transaction on sales and operating profit for the full year,
compared with the full year 2018. Movements in exchange rates are
often volatile and unpredictable, therefore the actual impact could
be significantly different.
Provided there is no material deterioration in trading
conditions the Board has confidence that the Group will make
further progress in 2019.
Spirax-Sarco Engineering plc expects to publish its 2019
half-year results on Wednesday 7(th) August 2019.
Enquiries:
Nicholas Anderson, Group Chief Executive
Kevin Boyd, Chief Financial Officer
Tel: 01242 535234
* References to organic changes exclude 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.
Cautionary statement
This announcement contains certain forward-looking statements
with respect to the Group's performance. By their nature, these
statements involve uncertainty since future events and
circumstances can cause results and developments to differ
materially from those anticipated. The forward-looking statements
reflect knowledge and information available at the date of
preparation of this announcement and subject to applicable law or
regulation we undertake no obligation to update these
forward-looking statements.
About Spirax Sarco
Spirax--Sarco Engineering plc is a thermal energy management and
niche pumping specialist. It comprises three world--leading
businesses: Steam Specialties, for the control and management of
steam; Chromalox, for electrical thermal energy solutions; and
Watson-Marlow, for peristaltic pumping and associated fluid path
technologies. The Steam Specialties business and Chromalox provide
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. Both
businesses help their end users to improve production efficiency,
meet their environmental sustainability targets, 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, UK, has strategically
located manufacturing plants around the world and employs over
7,800 people, of whom over 1,600 are direct sales and service
engineers. Its shares have been listed on the London Stock Exchange
since 1959 (symbol: SPX) and it is a constituent of the FTSE 100
index.
Further information can be found at
www.spiraxsarcoengineering.com
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END
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