Spectris reports Q1 sales drop but sees outlook improving

Precision measurement group Spectris has kept its projections for 2024 unchanged despite a "softer-than-anticipated" first quarter, with sales falling against a strong comparative period last year.

The company, which provides high-tech instruments, test equipment and software for industrial applications, said sales were down 8% on a like-for-like basis in the three months too 31 March, with conditions in some of its end markets like China weaker than hoped.

That compared with a 3% decline in LFL sales in the fourth quarter of last year, and was up agains 24% LFL sales growth in the first quarter of 2023.

Nevertheless, Spectris said it still ended the quarter with an order book of £534.2m which grew 3% over the three-month period. Its book-to-bill ratio – which compares orders received to orders billed – of 1.07 times provides good levels of cover within the expected range of four to five months, the company said.

Looking ahead, the company said it continues to expect to deliver "another year of progress in 2024" with the expansion of operating margins, though the full-year outcome will be weighted towards the second half alongside an improving outlook in a number of key end markets.

"While conditions in some of our end markets were softer than expected in the first quarter, notably China, we continue to expect to deliver progress this year as markets improve, with progress weighted towards the second half," said chief executive Andrew Heath.

"As a higher quality, more resilient business, facing off to attractive markets, we are well placed to deliver continued organic growth, expand operating margins towards our target of 20%+ and compound growth through M&A."