With its first-quarter sales warning consigned to the history books, instrumentation and controls group Spectris (SXS) recovered steadily through the rest of 2013. Numbers were flagged six weeks ago, so there were no surprises here. But there was very little growth, and management is understandably reluctant to give any detail on current trading before April.
Banking £98m of profit from the sale of Fusion UV more than halved net debt. But it flattered the bottom line, too, and with like-for-like sales flat, it was the decrease in interest costs which nudged adjusted pre-tax profit up 1 per cent to £206m. Only the materials-analysis division grew, mostly due to pharmaceutical work, but higher research and development spend trimmed margins and left adjusted operating profit flat at £63m.
Still, management expects another good year from pharma and thinks the worst of US academic cuts may be over, which should offset weaker mining sales. There could also be some big orders from the electronics industry, although timing is impossible to predict. Indeed, a drop in demand from electronics customers halved sales at the instrumentation unit's Japanese business - though management hints at modest signs of recovery.
Broker N+1 Singer expects adjusted pre-tax profit of £219m in 2014, giving adjusted EPS of 142p (from 133p).
SPECTRIS (SXS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,459p | MARKET VALUE: | £2.9bn | |
| TOUCH: | 2,458-2,459p | 12-MONTH HIGH: | 2,572p | LOW: 1,831p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 15 | |
| NET ASSET VALUE | 711p* | NET DEBT: | 12% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 0.79 | 54 | 37 | 24.3 |
| 2010 | 0.90 | 120 | 83 | 28 |
| 2011 | 1.11 | 166 | 109 | 33.6 |
| 2012 | 1.23 | 185 | 120 | 39 |
| 2013 | 1.20 | 272 | 169 | 42.75 |
| % change | -2 | +47 | +41 | +10 |
Ex-div: 28 May Payment: 25 Jun *Includes intangible assets of £699m, or 588p per share | ||||
