Spectris 'pleased' with first half progress

Precision measurement technology company Spectris reported 6.1% growth in first-half sales from continuing operations on Monday, to £570.2m, with adjusted profits growing while reported earnings tumbled.

The FTSE 250 firm said adjusted operating profit was ahead 6.2% year-on-year for the six months ended 30 June, at £72.3m, while its operating margin remained stable at 12.7%.

Its profit before tax jumped 8% to £70.3m, while adjusted earnings per share advanced 12.2% to 49.8p.

Adjusted cash flow conversion, meanwhile, tumbled 78 percentage points to 39%, from 117% in the first half of last year, while its return on gross capital employed expanded 140 basis points to 13.8%, from 12.4%.

On a statutory basis, Spectris reported a 77% fall in profit before tax to £41.8m, while basic earnings from continuing operations slid 55.1% to 43.4p.

The board announced a dividend of 24.1p per share, up 5% on the 23p distribution paid for the first six months of 2021.

“Over the past three years, we have transformed the group into a more focussed, more profitable and more resilient business, with the ability to compound growth at a higher rate through the cycle,” said chief executive officer Andrew Heath.

“Today, Spectris is in a position of strength with a robust balance sheet, well positioned in attractive end markets, with strong fundamentals, supported by key sustainability themes to deliver structural growth.

“We have fantastic, engaged people all contributing to a purpose-led, high-performance growth culture.”

Heath said he was “pleased” with the company’s progress in the first half.

“We are continuing to see healthy demand for our products and services, with strong like-for-like growth in both orders and sales.

“While vigilant to the macro environment and alert to signs of changes in demand, we have confidence in our business and have increased our investment for growth in research and development, to enhance our customer offerings.

“With our current order visibility, we expect to deliver high single digit organic sales growth and margin expansion for the full year, supported by the Spectris Business System and pricing already in the order book.”

The successful sale of Omega delivered “significant” shareholder value, which Andrew Heath said demonstrated the firm’s “continued portfolio discipline” as it looked to “improve the quality” of the group further.

“The next stage of our strategy will advance our ambition to be a leading sustainable business, delivering on our purpose to help make the world cleaner, healthier and more productive.

“We will build on the platform we have created to deliver strong, sustainable organic growth through the cycle, alongside continued margin expansion.”

At 1100 BST, shares in Spectris were down 5.85% at 2,927p.

Reporting by Josh White at Sharecast.com.