Spirax Group keeps sales guidance, but FX to weigh on profits

Spirax Group, which rebranded from Spirax-Sarco Engineering earlier this year, said currency headwinds are expected to persist during 2024, with an impact of around 3% to sales and 6% to adjusted operating profit. The sales impact was downgraded from 5% at the time of its full-year results in March.

However, the company is still guiding to mid to high-single-digit organic growth in revenues, and modest progress in the adjusted operating profit margin from 20.7% last year.

Organic sales increased by a low-single-digit percentage during the first four months of the year, in line with the board's expectations, given strong comparatives last year and ongoing weakness in key markets.

According to industry forecasts by CRH Economics, global industrial production grew by just 1.7% in the first quarter, with IP growth negative in the US, Germany and South America, while weakening in China. However, IP is tipped to recover later in the year.

Spirax said demand was broadly flat on last year during the first four months of 2024, with demand from biopharm customers starting to show "early signs of improvement", though there has been no increase in demand from semiconductor wafer fabrication equipment (or semicon) customers.

"We continue to anticipate mid to high-single-digit organic growth in group revenues, in line with the forecast phasing of IP and an increase in Biopharm and Semicon demand during the latter part of the year," the company said in a statement.