Spirax-Sarco Engineering (SPX)

Sector:

Engineering

Index:

FTSE 100

10,030.00p
   
  • Change Today:
    -70.00p
  • 52 Week High: 11,855.00
  • 52 Week Low: 8,058.00
  • Currency: UK Pounds
  • Shares Issued: 73.77m
  • Volume: 23,240
  • Market Cap: £7,399m
  • RiskGrade: 124

Spirax-Sarco warns of coronavirus impact on 2020 growth

By Sean Farrell

Date: Wednesday 11 Mar 2020

LONDON (ShareCast) - (Sharecast News) - Spirax-Sarco warned the impact of the coronavirus and negative currency movements would offset underlying growth in 2020 as the industrial engineering company reported a 7% increase in adjusted profit for 2019.
Adjusted operating profit for the year to the end of December rose to £282.7m from £264.9m as revenue rose 8% to £1.24bn. Pretax profit fell 18% to £236.8m due to a non-recurring gain from a disposal in 2018.

Spirax-Sarco increased its final dividend by 10% to 78p a share. The annual dividend rose 10% to 110p a share.

The FTSE 100 company said it expected the COVID-19 coronavirus to reduce annual sales and profit by 2% to 4%. Combined with negative currency movements the virus's effect is likely to offset underlying growth in 2020, the company said.

Spirax-Sarco said its estimates assumed that the impact on global industrial production would be less than that suffered by China and that the full impact would be contained in the first half with global production recovering in the second half. It said the outcome could be significantly different with the situation changing quickly.

"Against a very uncertain macroeconomic backdrop, we currently estimate that the combination of the twin headwinds of currency and COVID-19 will offset the underlying organic growth in the business," Spirax-Sarco said.

Spirax-Sarco said trading in China was significantly below expectations in February but that its factories there were returning to normal levels by the end of the month. China makes up almost 11% of group sales and about 75% of what the company sells in China is made at its two factories in the country.

Profit in 2019 was boosted by strong performances at the company's steam specialties business, which increased organic sales by 6%, and a 12% increase in sales at the Watson-Marlow fluid technology division.

Nicholas Anderson, chief executive, said: "Both the steam specialties and Watson-Marlow businesses benefited from the successful implementation of our strategy, achieving strong organic sales and profit growth ... Political and economic uncertainty, as well as COVID-19, continue to dampen global industrial production growth forecasts, although we currently assume that conditions will begin to improve during the second half of the year."

The company also announced that Kevin Boyd, chief financial officer, would retire by the end of 2020. He joined as CFO in 2016.



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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

SPX Market Data

Currency UK Pounds
Share Price 10,030.00p
Change Today -70.00p
% Change -0.69 %
52 Week High 11,855.00
52 Week Low 8,058.00
Volume 23,240
Shares Issued 73.77m
Market Cap £7,399m
RiskGrade 124

SPX Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
94.3% below the market average94.3% below the market average94.3% below the market average94.3% below the market average94.3% below the market average
88.24% below the sector average88.24% below the sector average88.24% below the sector average88.24% below the sector average88.24% below the sector average
Price Trend
0.34% above the market average0.34% above the market average0.34% above the market average0.34% above the market average0.34% above the market average
14.29% below the sector average14.29% below the sector average14.29% below the sector average14.29% below the sector average14.29% below the sector average
Income
97.22% below the market average97.22% below the market average97.22% below the market average97.22% below the market average97.22% below the market average
100% below the sector average100% below the sector average100% below the sector average100% below the sector average100% below the sector average
Growth
83.55% above the market average83.55% above the market average83.55% above the market average83.55% above the market average83.55% above the market average
69.70% above the sector average69.70% above the sector average69.70% above the sector average69.70% above the sector average69.70% above the sector average

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Buy 2
Neutral 8
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neutral
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Paid 24-May-24 10-Nov-23
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