10th Mar 2021 08:24
(Alliance News) - FTSE 100-listed Spirax-Sarco Engineering PLC on Wednesday said its fourth quarter was better than expected, with full-year profit nudging up.
Revenue for 2020 fell 4% to GBP1.19 billion from GBP1.24 billion a year earlier. On an organic basis, revenue declined by 3%. Currency movements had a 2% negative effect on sales during the year, the Cheltenham, England-based company noted.
Pretax profit edged up 1% to GBP240.1 million, as the thermal energy management and pumping firm's operating profit margin improved to 20.9% from 19.7%.
Organically, the adjusted operating margin increased by 40 basis points, despite an organic sales decline of 3%, due in part to temporary cost containment initiatives taken in each of the company's units. These cost initiatives mostly reduced expenses related to travel, marketing and employment, lowering Spirax-Sarco's overheads by GBP22 million.
Spirax-Sarco reported strong organic sales and profit growth in Watson-Marlow, while organic sales for Steam Specialties declined broadly in line with industrial production across its global markets. In Electric Thermal Solutions, organic sales fell 12%. The latter two divisions still performed robustly given challenging market conditions, the company said.
"Following a stronger-than-anticipated fourth quarter, we are very pleased with the group's performance in 2020, given the unprecedented circumstances caused by the Covid-19 pandemic," said Chief Executive Nicholas Anderson.
"The excellent growth in Watson-Marlow was driven by the Pharmaceutical & Biotechnology sector, where demand accelerated due to Covid-19 vaccine development and production. The improved outlook for industrial production growth, strong order book, robust prospects for Watson-Marlow and continued investments leave us well-placed for 2021," added Anderson.
Spirax-Sarco raised its dividend for the year by 7% to 118.0 pence.
The stock was trading 4.4% higher in London on Wednesday at 11,505.00p per share.
By Evelina Grecenko; [email protected]
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