27th Feb 2015 13:13
LONDON (Alliance News) - Instrumentation and controls company Spectris PLC Friday reported a fall in pretax profit and sales in 2014, hit by the strength of sterling and difficult trading conditions in key markets, but said it should get a boost from acquisitions and new product investments in 2015.
The FTSE 250 constituent said its pretax profit for the year was GBP171.1 million, down 37% from GBP271.7 million in 2013, when it had booked a GBP98.3 million profit on business disposals. Excluding this and some other items, its adjusted pretax profit fell to GBP192.5 million, from GBP205.6 million, as sales fell 2% to GBP1.17 billion, from GBP1.20 billion. A strong year of trading in North America was offset by weakness in its European and Chinese markets, it said.
But the company has hiked its dividend to 46.5 pence, up 9% year-on-year and comprising a 30.5 pence final dividend and a 16 pence interim dividend.
"Trading in 2014 was principally driven by a strong North American performance, partly offset by more challenging conditions in the Eurozone and China. Assuming a similar macroeconomic environment in 2015, we expect to deliver progress as we benefit from our investment in new products and from the acquisitions made during 2014 and the early part of 2015," said Spectris Chief Executive John O'Higgins.
"These investments, together with our broad end-market exposure and strong financial position, provide the board of Spectris with confidence that the company is well-positioned for 2015 and beyond," O'Higgins added.
Still, Spectris shares were down 1.5% to 2,171.00 pence on Friday.
Spectris said Materials Analysis revenue fell 4% in the year to GBP348.8 million, from GBP362.4 million in 2013, hit by a 3% decline in like-for-like sales due to weaker demand in the metals, minerals and mining industries and first-half weakness in the academic research segment. This was partially offset by sales growth in the pharmaceutical and semiconductor sectors.
Operating profit and margins declined in the division on a like-for-like basis due to low sales, adverse product and geographical mix and costs related to the launch of new products for the life sciences sector.
Test and Measurement revenue fell to GBP342.9 million from GBP348.7 million in 2013, despite a 4% rise in like-for-like sales as sterling's strength pulled back the revenue number by six percentage points. Spectris said the division saw good growth in the automotive sector, particularly in North America and Japan, but sales to the aerospace sector declined against tough comparatives and a second half fall in sales to Russia.
In-line Instrumentation sales ticked lower, down to GBP261.4 million from GBP265.7 million, again hit by adverse currency translation as like-for-like revenue rose 3%. Energy and utilities sales increased over the year, boosted by strong demand in China on the back of legislation in the country to reduce emissions and by good growth in the downstream petrochemical markets in North America and the Middle East.
That strength was offset by a fall in sales to the pulp and paper markets, as weak market conditions resulted in mill closures, curtailments and de-stocking. Sales of tissue applications grew strongly in the year, but this was more than offset by lower demand for graphic coated paper, particularly in China and Europe. Chinese trading conditions were also dragged lower by project delays and increased price competition.
Spectris said sales in its Industrial Controls business were also held back by sterling strength, with sales broadly flat at GBP220.6 million against GBP221 million in 2013 but like-for-like sales rising 5%.
By Sam Unsted; [email protected]; @SamUAtAlliance
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