Spirax-Sarco Engineering PLC AGM Statement (7085M)
May 11 2015 - 1:00AM
UK Regulatory
TIDMSPX
RNS Number : 7085M
Spirax-Sarco Engineering PLC
11 May 2015
News Release
Monday 11(th) May 2015
AGM STATEMENT
Spirax-Sarco Engineering plc, the world leader in the control
and efficient use of steam and in peristaltic pumping and
associated fluid path technologies, issues the following AGM
Statement in respect of the four month period from 1(st) January
2015 to 30(th) April 2015, ahead of its Annual General Meeting
("AGM") today at 2.00pm.
Trading
Growth in industrial production and the global economy generally
has further eased, continuing the slow down in growth through the
second half of 2014, in both developed and especially emerging
markets. Our markets in Europe, Middle East and Africa (EMEA) look
to have stabilised, albeit at low levels of industrial production
growth. Markets in Asia Pacific have shown a further slowing of
industrial production growth, particularly in China, Korea and
Australasia. In the Americas, industrial production growth has
weakened in North America and remains negative in South
America.
For the four months ended 30(th) April 2015, Group organic sales
increased by 4%. Currency headwinds have largely abated, although
sales have been reduced by 1.8% on translation compared with the
average exchange rates for the first half of 2014; gains from the
stronger dollar have been more than offset by the impact of the
weaker euro. The normal seasonal increase in our Group order book
in the early months of this year has been at a lower level than the
strong order build at this time in 2014. Our Watson-Marlow Fluid
Technology business has again performed strongly, growing sales in
all geographic regions. In our steam specialties business, organic
sales growth has been more muted with overall project work again
reduced but day-to-day maintenance and repair business increased.
We have seen a small impact from the lower oil price, particularly
in Korea and Brazil, but the correlation between the price of oil
and our sales remains weak as we work with customers to deliver
many other benefits in addition to energy reduction. EMEA performed
well against a background of low industrial production growth. We
achieved modest organic sales growth in the Americas, with a better
performance in Latin America but organic sales in North America
were lower against a strong start in the prior year. Organic sales
were reduced in Asia Pacific due to a slower start to the year in
Korea; sales in China were overall stable.
Group operating profit was ahead of the comparable period in
2014, both on a reported and constant currency basis, reflecting
the contribution from higher sales and relatively flat material
input costs. This was partially offset by increased investment in
our strategic priorities to support growth and the previously
reported one-off headcount reduction costs of around GBP1 million
in the UK steam specialties manufacturing business, where
annualised benefits of GBP2 million per annum will accrue from
April 2015.
Financial position
The Group remains highly cash generative and maintains a strong
balance sheet, with the net cash balance increasing from GBP52
million at 31(st) December 2014 to GBP82 million at 30(th) April
2015. In April, we completed the acquisition of Asepco in the USA
for GBP7.0 million, which specialises in the design and manufacture
of high purity aseptic valves for the biotechnology and
pharmaceutical industries and will operate as part of our
Watson-Marlow Fluid Technology Group. If approved at the AGM, the
final dividend of 45p per share in respect of 2014, totalling GBP34
million, will be paid on 29(th) May 2015, and a special dividend of
120p per share in respect of 2014, totalling GBP91 million, will be
paid on 15(th) July 2015. There has been no material change in the
financial position of the Group during the period.
Outlook
The overall economic and market growth conditions in the early
months of this year are a little less favourable than expected,
reflecting the slower growth in Asia and the Americas. Our
business, in general, tends to lag economic movements by a couple
of quarters, however, we have good diversification across market
sectors and geographic regions, and anticipate a pick-up in
industrial activity in the second half of 2015. If recent exchange
rates prevail for the full year, the negative translation impact on
sales will moderate to a little less than 1%. Whilst markets remain
lacklustre, we remain focused on our strategic priorities to
generate our own growth and outperform our markets, which, together
with our fundamental strengths, gives the Board confidence that the
Group will make further progress in 2015.
Spirax Sarco will publish its half-year results on 5(th) August
2015.
Enquiries:
Nick Anderson, Chief Executive
David Meredith, Director Finance
Tel: 01242 535234
About Spirax Sarco
Spirax-Sarco Engineering plc is the world leader in each of its
two businesses, Spirax Sarco for steam specialties and
Watson-Marlow Fluid Technology Group for niche peristaltic pumps
and associated fluid path technologies. The steam specialties
business provides a broad range of fluid control products,
engineered packages, site services and systems expertise for a
diverse range of industrial and institutional customers. The
company helps its customers to improve production efficiency,
reduce energy costs, water usage and emissions, improve product
quality and enhance the safety of their operations. Watson-Marlow
Fluid Technology Group offers the ideal solution for a wide variety
of demanding fluid path applications with highly accurate,
controllable and virtually maintenance free pumps and associated
technologies. The Group is headquartered in Cheltenham, England,
has strategically located manufacturing plants around the world and
employs approximately 4,800 people, of whom around 1,300 are direct
sales and service engineers. Its shares have been listed on the
London Stock Exchange since 1959 (symbol: SPX)
Further information can be found at
www.spiraxsarcoengineering.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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