Spectris (SXS) is growing the top line, just not through like-for-like sales. Most of the revenue increase in the instrument and controls manufacturer's half-year results came from acquisitions made in the past year, which added £22.9m in sales and £4.2m in operating profit.
The reason for flat organic sales - up just 1 per cent year on year - was a drop-off in demand from North America and China, where sales were down by 2 per cent and 4 per cent, respectively. This isn't the case for all of Spectris's products, however. The industrial controls division - which makes and sells measuring and monitoring devices used in industrial production - reports strong underlying demand from Chinese factories seeking to increase automation.
The materials analysis unit saw the largest divisional growth in like-for-like sales, which offset stagnation or decline in each of the three other divisions. In the face of weaker trading, Spectris has been busy cutting overheads. The company expects this to contribute £6m in cost savings for the full financial year.
Peel Hunt now expects adjusted pre-tax profit of £195m for the year to December 2015, giving earnings per share of 125.3p (up from £192.5m and 124.4p in 2014).
SPECTRIS (SXS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,953p | MARKET VALUE: | £2.32bn | |
| TOUCH: | 1,951-1,954p | 12-MONTH HIGH: | 2,420p | LOW: 1,606p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 743p* | NET CASH: | 17% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 540 | 58.6 | 39.4 | 16.0 |
| 2015 | 563 | 49.2 | 33.9 | 17.3 |
| % change | +4 | -16 | -14 | +8 |
Ex-div: 15 Oct Payment: 13 Nov *Includes intangible assets of £767m, or 645p a share | ||||
