Spirax-Sarco reports better-than-expected margins in new year
Spirax‐Sarco Engineering said margins in the four months to April 30 were higher than expected after a rise in sales.
The company on Wednesday said its Watson-Marlow unit continued to experience “exceptional” Covid-19 vaccine-related demand from customers in the pharmaceutical and biotechnology sector.
“Group operating profit margin in the first four months of the year was higher than previously anticipated for the full year 2021, supported by the strong sales growth and higher operational gearing,” Spirax said ahead of its annual shareholder meeting.
“The world is recovering faster than previously anticipated from the adverse economic effects of the COVID-19 pandemic, supported by sizeable fiscal stimulus packages.”
Spirax said global industrial production was now forecast to expand 8.5% in 2021, compared to a forecast of more than 7% growth at the time of its final results in March.
“However, given the difficulties faced by many emerging economies in implementing their vaccination plans and the continued uncertainty surrounding the ability to resume normal international trading activities, it is plausible that these forecasts could be subject to revisions over the coming months,” the company warned.
Watson-Marlow's organic growth in sales to the pharmaceutical & biotechnology sector would more than 55% in 2021 due to continuing strong Covid-19 related demand.
“This sector accounted for over 55% of Watson-Marlow's sales in 2020. We anticipate the Group's other revenue streams will deliver organic sales growth in 2021 above the increased forecast for global IP growth. Additionally, Electric Thermal Solutions ended 2020 with a higher than-normal order book, which should add at least a further £8m to sales in the year.”