Recently appointed Spectris (SXS) chief executive Andrew Heath appears to be winning over investors, scrapping plans for a shared service centre in favour of a "more comprehensive" cost reduction programme next year, aimed at improving margins.
Mr Heath – who was appointed in September – said that while phase one of efficiency drive 'Project Uplift' was on track to deliver expected benefits, the costs involved with establishing a global shared services centre outweighed the "speed of the returns". In a bid to move the company towards higher-growth markets, where it says it possesses a competitive advantage, management has also launched a strategic review of its assets, capital allocation and portfolio competition.
Like-for-like sales were up 8 per cent in the four months to the end of October, with the materials analysis division enjoying the biggest rise at 12 per cent. However, Mr Heath acknowledged that operating margins remained "below both historic highs and that of our peers" – during the first half the adjusted operating margin was 9.7 per cent, down from 14.7 per cent over 2017.
It’s been a rough period for the instrumentation and controls specialist's shares, which have shed more than a quarter of their value since hitting a 12-month peak in June – even after a 10 per cent bounce on this news.
