Spectris sales rise as Asia sees good growth

Productivity-enhancing instrumentation and controls company Spectris posted a rise in four-month sales on Tuesday thanks in part to a strong performance in Asia, as it said full-year results should be in line with the group's expectations.

In the period from 1 July to end of October, reported sales were 9% higher than the same period a year ago and like-for-like sales were up 8%, with acquisitions, net of disposals, contributing 2% to sales growth, while forex had a negative impact of 1%.

Meanwhile, in the 10-month period to the end of October, LFL sales were up 6% and reported sales increased 5%.

LFL sales grew in all regions, with particularly good growth in Asia, driven by strong demand in China and Japan. In North America, Spectris said its performance was similar to that in the first half of the year, while growth in Europe moderated from the first half, though growth in orders improved.

In the company's end markets, there was notable LFL sales growth to pharmaceutical, automotive and semiconductor customers, as well as academic research, which recovered from a weak first half.

LFL sales rose across all four of business segments, particularly in the materials analysis segment, driven by strong growth in the pharmaceutical and semiconductor industries. LFL sales growth in the test and measurement business was similar to the first half.

In-line Instrumentation posted 8% growth, with notably strong demand in Asia, while the industrial controls segment saw growth moderate in the period, though the order book remains robust.

Spectris said the performance at Concept Life Sciences, which was bought back in January, has been below expectations but remedial action is being taken to improve operational effectiveness. Stronger growth at the other two operating companies in the materials analysis segment has more than offset the shortfall in expected profitability, it said.

The company also said on Tuesday that it has decided not to proceed with the new shared service centre as the costs would outweigh the expected speed of returns. Instead, it will implement a more comprehensive cost reduction programme next year.

Chief executive Andrew Heath said: "Spectris serves a diverse set of end markets with a number of high-quality businesses which have strongly-recognised brands in the target market segments they serve. It is clear we have high-quality technologies, strong market positions and customer relationships, as well as talented people.

"The group has good cash flow generation and a robust balance sheet, and we will continue to reinforce and build on these strengths in our businesses. It is pleasing that we have continued to deliver good organic growth in the period."

At 1005 GMT, the shares were up 9.8% to 2,309p.