Gloucestershire steam manufacturer reports stronger first half trading than feared

Spirax Sarco

Cheltenham-headquartered steam engineering and thermal energy company Spirax Sarco has reported a more resilient trading performance than it first feared.

Reported revenues were down four per cent, down five per cent organically, with industrial production down eight per cent, and the company warned that it anticipates a lower rate of economic activity in the final quarter.

Revenues for the six months ended June 30, were £569.7 million, down from £591.2 million during the same period last year, with operating profit at £110.8 million, down two per cent from last year.

There was good growth at its subsidiary Watson-Marlow which manufactures peristaltic pumps and other fluid technologies at its base in Falmouth and Thermocoax Developpement, the French designer and manufacturer of electrical thermal products which Spirax Sarco bought in May last year, also performed strongly.

However, sales and profit were down in its Steam Specialties and Electric Thermal Solutions divisions.

Spirax Sarco’s Group Chief Executive, Nicholas Anderson, said: In the first half of 2020 we delivered a resilient trading performance, which. although weaker than 2019, was stronger than originally feared.  This was achieved thanks to the outstanding efforts and dedication of our employees all over the world, who continued supporting our customers despite the unprecedented circumstances arising from the COVID-19 pandemic.

“Sales performance for the Group in the second quarter was in line with our expectations at the time of our AGM Statement in May, with adjusted operating profit ahead due to stronger than anticipated cost containment and efficiency improvement initiatives.  As hopes of a V-shaped recovery recede, we now anticipate a lower rate of economic activity in the fourth quarter.  As a result, we believe that organic revenue growth in the second half of the year will be lower than we anticipated in May.  However, due to the operating profit being stronger than forecasted in the first half, our expectations for the full year adjusted operating profit remain unchanged.”