11th May 2015 06:47
LONDON (Alliance News) - Spirax-Sarco Engineering PLC Monday said its organic revenue was up 4% in the first four months of 2015, and its operating profit was also higher even though exchange rate movements reduced its revenue earned overseas by 1.8% when translated into sterling.
In a statement ahead of the company's Annual General Meeting, the engineer said the normal seasonal growth in its order book hadn't been as strong in the early months of this year compared with the strong growth it saw early in 2015.
"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," it said.
The company said it had seen a "small impact" from the lower oil price, particularly in Korea and Brazil, but added that the correlation between the oil price and its own sales remains weak.
On a regional basis, Spirax-Sarco said it was performing well in Europe, Middle East and Africa, achieved modest organic sales growth in the Americas, while a low start in Korea meant sales were down in Asia Pacific. China was stable, it said.
"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," the company said.
Spirax-Sarco said it had a net cash balance of GBP82 million at the end of April, up from GBP52 million at the end of 2014.
"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," it said.
The company expects the hit on revenue from exchange rate movements to be less than 1% for the year as a whole, if rates remain where they currently are.
The company will publish its half year results on August 5
By Steve McGrath; [email protected]; @stevemcgrath1
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