Spirax-Sarco Engineering (SPX) another quality UK engineer points to tough times ahead?
Yesterday we had results from Rotork and today was the turn of that other highly rated engineering group. Spirax-Sarco Engineering is a world leader in the design and manufacture of steam and thermal energy management solutions and, through its Watson-Marlow Fluid Technology Group, the design and manufacture of world-leading niche peristaltic pumps and associated fluid path technologies. Interim results showed a modest decline in earnings per share with currency the biggest issue, as was the case with Rotork. However, it is the outlook statement that is of greatest interest.
For the 6 months to 30th June 2015 reported revenue was flat at £320m but up 3% on a constant currency basis. Reported adjusted operating profit was £65.8m, down 2%, or flat if one strips out currency impact and adjusted earnings per share down 2% at 60.5p. The Steam Specialities business is the largest, delivering overall revenue of £247.1m and operating profit of £48.6m (operating margin 19.7%) for the 6 months. Watson-Marlow Fluid Technology generated revenue of £72.8m and operating profit of £21.8m with operating margins a whopping 29.9%. Adjusted operating profit of £65.8m resulted in a net operating cash…