Investec puts Spectris under review after full year earnings

Investec has placed its rating and price target on Spectris under review after the company reported its full year earnings.

The electrical engineering group said statutory full year pre-tax profit fell 17% to £171.1m, although sales rose 3% to £1.19bn at constant exchange rates.

Growth in Europe and Asia was offset by a challenging environment in North America and the Rest of the World.

Chief executive John O’Higgins said 2015 was characterised by mixed trading conditions but the benefits of restructuring measures announced last July will “enable us to better align cost growth with sales growth in 2016”.

“There was nothing dramatic in Spectris’s results and outlook statement to change our view that this group is fundamentally sound, but currently lacking in market growth drivers,” said Investec analyst Michael Blogg.

“Much will depend on the USA, which decelerated in 2015 (-2% underlying), and various ‘Rest of the World’ markets, but Spectris is taking measured steps to reshape its cost base while maintaining investment for future growth (especially in new products).”

Shares rose 8.05% to 1,637p at 1334 GMT.