Acquisitions help boost Spectris as it nabs Imperial Brands chairman

Productivity-enhancing instrumentation and controls company Spectris updated the market on its trading for the period from 1 January to 30 April on Wednesday, with reported sales increasing by 22%.

The FTSE 250 company said group like-for-like sales increased 4% against a weak prior year comparator, whilst acquisitions contributed 5% to sales growth and foreign currency exchange movements positively impacted revenues by 13%.

Like-for-like sales grew 11% in the Asia Pacific region, 4% in Europe and declined by 1% in North America, although in the latter, the board said order growth in certain longer cycle industries such as energy and telecoms outpaced sales growth.

All four segments delivered like-for-like sales growth in the period, with particularly strong growth in the in-line instrumentation segment.

The group said it continued to be highly cash generative and maintained a “strong” financial position.

Spectris’ ‘Project Uplift’ initiatives were progressing as planned, and the board said it still expected a net cost in 2017 of £14m.

Elsewhere, it identified further restructuring activities to enhance operating performance in certain of its businesses, at a cost of £5m.

On 15 May, Spectris completed the acquisition of Setpoint for a purchase consideration of $10m.

Setpoint would become an integrated product line of Brüel & Kjær Vibro, the board said, growing the company’s presence in the condition monitoring market.

It described Setpoint as a “leading provider” of vibration and condition monitoring solutions to process industries, primarily the oil and gas and power generation sectors.

The acquired technology enabled customers to improve machinery availability, productivity and reliability by delivering accurate condition information, the Spectris board explained.

“We are generally encouraged by the performance year to date, which has been in line with expectations,” said Spectris chief executive John O'Higgins.

“Trading conditions in the period have improved compared with 2016, although performance is still fairly mixed and as a result, the group's underlying outlook for 2017 remains broadly unchanged.

“We continue to focus on transitioning our customer offering towards the provision of solutions and this clear strategic direction, as well as broad geographic and end-market diversification and strong financial position, provide the board with confidence that the company is well positioned for the future.”

At the same time, Spectris issued an announcement that Mark Williamson had been appointed to the board as non-executive chairman with effect from the conclusion of the company’s annual general meeting to be held on 26 May.

As the firm had previously announced, incumbent chairman Dr John Hughes had advised his intention to retire from the board as soon as a successor had been identified, and therefore would step down with effect from the conclusion of the AGM.

Resolution 6 set out in the AGM Notice, proposing Hughes' re-election, would therefore not be put to the meeting.

Spectris said Williamson was currently chairman of Imperial Brands, and senior independent director and chairman of the audit committee of National Grid.

He was formerly senior independent director and chairman of the audit committee of Alent.

Until 2012, Williamson was chief financial officer of International Power and prior to that held senior financial positions at Simon Group.

He is a qualified accountant, the board confirmed.

“I am delighted that Mark has agreed to join our board as chairman,” said Spectris senior independent director Russell King.

“His considerable business and financial expertise combined with his broad governance experience will further strengthen the Spectris board.

“I should also like to take this opportunity to express the board's deep appreciation for the notable contribution made by John Hughes over the course of his 10 years' service to Spectris, a period during which the group has made significant strategic and financial progress.”