The Spectris (SXS) strategic review is complete. The ‘profit improvement programme’ is now under way. The supplier of productivity-enhancing instruments and controls is axing an undisclosed business within its test and measurement division. It has also proposed the restructuring of its January 2018 acquisition, Concept Life Sciences (CLS).
CLS's management was replaced in the second quarter. The business, which sits within Spectris’s materials analysis segment, posted an underlying loss of £4.9m, which was below expectations. This was largely attributed to the loss of a major pharmaceutical customer. Management wants to close the CLS environmental analytical laboratories, which would otherwise require an unjustifiable amount of investment in order to return to growth.
Goodwill impairments of £35.1m, along with £32.4m relating to other intangibles, have been charged to the income statement, pushing Spectris into a statutory operating loss. CLS has now been combined with Spectris’s Malvern Panalytical business, which provides scientific measuring instruments.
House broker JP Morgan Cazenove forecasts full-year 2019 adjusted pre-tax profits and EPS of £248m and 165.69p respectively, rising to £270m and 180.18p in 2020.
| SPECTRIS (SXS) | ||||
| ORD PRICE: | 2,672p | MARKET VALUE: | £3.1bn | |
| TOUCH: | 2,671-2,675p | 2,932p | LOW: 1,925p | |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 64 | |
| NET ASSET VALUE: | 978p* | NET DEBT: | 28% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 728 | 96.6 | 74.6 | 37.5 |
| 2019 | 759 | -50.1 | -41.8 | 40.5 |
| % change | +4 | - | - | +8 |
| Ex-div: | 10 Oct | |||
| Payment: | 08 Nov | |||
| *Includes intangible assets of £943m, or 814p a share | ||||
