Revenues have risen 28 per cent to £547.6 million at Cheltenham-headquartered steam engineering company Spirax Sarco.
Commenting on the company’s half year results, Nicholas Anderson, Chief Executive, said: “We are very pleased to report strong organic sales growth of 7% in the first half, ahead of global industrial production growth, and organic operating profit growth of 15%. We have seen strong organic sales growth in both the Steam Specialties division and Watson‐Marlow, reflecting the benefits of the successful implementation of our strategy.
“In addition, integration of the two significant acquisitions we made in 2017, Gestra and Chromalox, is progressing to schedule and their overall performance continues to be in line with our acquisition plans. The strong first half organic sales growth was in line with our expectations, and for the second half comparisons with the prior year will be tougher. Overall, our full‐ year expectations remain unchanged.”
Sales grew strongly in the first half of the year, up 28% to £547.6 million (2017: £428.6 million). Organic growth, excluding acquisitions and on a constant currency basis, was 7%. Growth was supplemented by an additional four months of revenue from Gestra, which joined the Group in May 2017, and six months of revenue from Chromalox, which was acquired in July 2017.
Organic sales growth was just under 7% in the company’s Steam Specialties division.
Watson‐Marlow had organic sales growth similar to the first half of last year at 9%.
Group adjusted operating profit grew strongly in the first half of the year, up 24% to £125.7 million (2017: £101.2 million).
The favourable currency tailwind, experienced following the UK’s decision in June 2016 to exit the European Union, became a headwind in the period as sterling strengthened against the basket of currencies that traded in. On a translation basis, sales and profits decreased by 3% while transaction further impacted profit, giving a total reduction to profit from currency movements of 5%.
A lack of clarity surrounding post‐Brexit trade agreements and growing rhetoric regarding trade wars and protectionism are beginning to impact investment confidence in the region says the company, with large project orders having begun to be affected by the uncertainty surrounding post‐Brexit trade terms and concerns over the impact of protectionist rhetoric and actions from the USA.
Nevertheless, the company states that its resilient business model and its ability to self‐ generate sales from small improvement projects, as well as the significant proportion of revenue generated from maintenance and repair orders, mean that it remains confident in its ability to achieve further growth.