19th Feb 2019 08:01
LONDON (Alliance News) - Spectris PLC on Tuesday reported a 22% reduction in annual profit as it assesses the potential growth of its operating units.
For 2018, the FTSE 250 measuring devices maker posted pretax profit of GBP218.0 million from GBP278.4 million a year prior. On an adjusted basis, pretax profit rose 3% to GBP241.4 million.
Revenue rose 5% year-on-year to GBP1.60 billion while operating profit dipped 3% to GBP176.4 million.
Spectris is conducting a review of its businesses and operations to focus on highest growth areas and "where we are or can be competitive" to deliver profitable growth.
So far, its Malvern Panalytical, HBK, and Omega businesses are seen as having growth potential, and they represent some 60% of group sales. Businesses which have less potential, however, could be sold.
"I am pleased our performance in 2018 was slightly ahead of expectations, reflecting the quality of our businesses," said Chief Executive Andrew Heath.
"We were able to build on the increased momentum across our end markets and delivered good like-for-like sales growth. We expect sales growth to moderate in 2019, given the more cautious macroeconomic outlook."
Like-for-like sales growth was achieved in all geographic regions with particularly good growth in Asia, up 10%, led by strong demand in China. North America sales rose 4%, Europe by 3%, and the Rest of the World by 1%.
The company's annual dividend grew by 8% to 61.0 pence per share from 56.5p, after Spectris proposed a final dividend of 40.5p.
Looking ahead, the company said its profit improvement programme is progressing wells.
The programme is anticipated to deliver annualised benefits of more than GBP30 million, of which between GBP15 and GBP20 million are expected to be realised during 2019.
"Spectris has strong gross margin businesses, but our operating margin performance has been below our historic highs and operational gearing has disappointed over the past few years," the company said.
It added: "Our initiatives, which are focused on improving gross margin and constraining overheads to drive future operating margin expansion as we grow, will continue throughout 2019. Our aim is to return our operating margin to at least our previous highs."
Related Shares:
Spectris