7th Mar 2019 08:24
LONDON (Alliance News) - Valves and pumps maker Spirax-Sarco Engineering PLC boosted its 2018 dividend Thursday as profit and revenue both beat market forecasts in a "strong" industry-beating set of results.
In 2018, pretax profit widened 50% to GBP288.8 million from GBP192.5 million the year prior. This was after revenue rose 15% to GBP1.15 billion from GBP998.7 million the year before, up 7% on an organic basis.
Profit performance was helped by the effect of one-off items swinging to a GBP34.2 million headwind from a GBP36.6 million tailwind the year prior.
This was primarily due to a GBP47.4 million profit on the sale of a subsidiary reported in 2018, partially offset by a rise in amortisations of acquired intangible assets on the year prior.
Adjusted pretax profit, which excludes exceptional items, climbed 11% to GBP254.6 million from GBP229.1 million the year prior.
The 2018 figures saw the FTSE 100-listed firm outperform analyst forecasts. According to consensus figures for 2018 provided by Spirax-Sarco, adjusted pretax profit was expected to grow to GBP252.6 million with revenue rising to GBP1.14 billion.
"We are very pleased to report strong organic sales growth of over 7% in 2018, ahead of global industrial production growth, and organic adjusted operating profit growth of over 12%," Chief Executive Nicholas Anderson said.
"We have seen strong organic sales growth across all three businesses, reflecting the benefits of the successful implementation of our strategies."
Spirax-Sarco proposed a 71.0 pence per share final dividend, up 15% from 62.0p the year prior.
For the full year, the dividend was increased 14% to 100.0p from 87.5p the year before. According to company-compiled figures, analysts had anticipated the dividend to jump to 98.7p in 2018.
"The integration of the Gestra and Chromalox acquisitions progressed to schedule and their overall performance continues to be in line with our expectations," Anderson added.
In April 2017, Spirax-Sarco acquired German boiler control firm Gestra AG for EUR186 million. This was followed quickly by temperature management product firm Chromalox Inc for USD415 million in May 2017.
"In 2019 we will continue to embed our strategies that enhance our ability to self-generate growth, in order to mitigate the effects of slowing global industrial production and increased market uncertainties," Anderson continued.
"Assuming no significant deterioration in trading conditions, the board expects to make further progress in 2019."
Spirax-Sarco, looking forward, does expect global industrial production to potentially decline in 2019 on 2018, though there is a "higher" degree of uncertainty than usual.
Shares in Spirax-Sarco were 1.6% lower at 6,740.00p on Thursday.
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