Growth is clearly getting harder to come by for industrial components specialist Spectris, and it was Omega, acquired for $475m (£302m) last year, that flattered the top line in these half-year results. Organic revenue still grew 4 per cent, however, and demand for instrumentation and controls that improve efficiency, particularly in North America and Asia, should continue to offset predictable weakness in Europe.
Excluding acquisitions, the group's test and measurement division did best. Like-for-like sales rose 3 per cent, but improving margins drove up adjusted operating profit by 18 cent cent to £23.3m. Sales of R&D tools to luxury car makers like Jaguar and BMW went well and, spending more on research than volume manufacturers means a more resilient earnings stream for Spectris. This clearly benefited Germany, the group's most important European market. Revenue growth here slowed to 3 per cent, but limited the Europe-wide decline to just 1 per cent.
Crucially, a third of all sales are high margin aftermarket work. Testing kit for new aircraft models, headsets for smartphones and space satellites also remained popular, while a sharp uptick in demand from drug companies and miners for materials analysis technology easily outstripped lower demand from Chinese cement and steel firms.
Still, factoring in slightly lower growth, broker Numis Securities trimmed its 2012 adjusted pre-tax profit estimate by 3 per cent to £220m, giving adjusted EPS of 139p (2011: £192m and 124p).
SPECTRIS (SXS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,523p | MARKET VALUE: | £1.79bn | |
| TOUCH: | 1,520-1,523p | 12-MONTH HIGH: | 1,925p | LOW: 1,029p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 533p* | NET DEBT: | 53% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 507 | 70.8 | 46.2 | 8.2 |
| 2012 | 597 | 75.4 | 49.4 | 13.5 |
| % change | +18 | +6 | +7 | +65 |
Ex-div: 17 Oct Payment: 9 Nov *Includes intangible assets of £719m, or 613p per share | ||||
