Spirax pumped up by 2012 prospects

All segments of Spirax-Sarco Engineering were firing on all cylinders in 2011, as the peristaltic pumps specialist produced figures a shade ahead of market expectations.

Revenue of £650.0m in 2011 was up 10% on 2010's £589.7m and ahead of market expectations of £639.6m. Organic sales growth was nearly 10%, led by Watson-Marlow and Asia Pacific but with all segments contributing to the strong performance.

Adjusted profit before tax climbed 13% to £137.2m from £121.6m in 2010, ahead of the market consensus forecast of £136.2m. The statutory pre-tax profit, after charging the amortisation of acquisition-related intangible assets and acquisition and disposal costs, was £132.3m. This compares with £123.5m in 2010, which also included an exceptional revaluation gain in Mexico and the impairment of acquisition-related intangible assets.

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Adjusted earnings per share (EPS) jumped 14% to 124.8p (consensus: 121.0p) from 109.5p.

Even the dividend payment was a bit better than the market had been anticipating, with the full year dividend rising to 49.0p from 43.0p in 2010, although the 2010 figure excludes the 25p special dividend declared in respect of 2010 but actually paid in July 2011.

Despite the return of cash to shareholders during the year, the group ended 2011 with net cash of £12.3m, albeit down from £34.4m at the end of 2012.

Spirax-Sarco said it foresees continued challenging market conditions broadly across Europe but this is likely to be offset by opportunities in most of the emerging markets in which it operates.

Regional break-down

The Europe, Middle East and Africa (EMEA) region saw revenue rise 7% year-on-year in constant currency (CC) terms, while operating profit improved 13% in CC terms.

Asia Pacific revenues rose 9% on a CC basis while on the same basis operating profit improved by 7%.

In the Americas. revenue on a CC basis was up 10% on the year before while operating profit surged 17%.

Mark Vernon, the group's Chief Executive, hailed another year of strong results and sales and profit growth across all business segments.

"Against a backdrop of macro-economic uncertainty, our robust business model has resilient characteristics that help to insulate the group's performance against economic headwinds, and we have continued to invest in market penetration, geographic expansion in emerging markets and new product development to enhance our mid and long-term growth prospects," Vernon said.

"Our fundamental strengths give the board confidence that the group will make further progress this year," Vernon added.

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