Nov 26, 2015 at 05:00 Spectris profit down as weak trading persists Profit at precision instrument maker Spectris (SXS) is not measuring up, according to Deutsche Bank.
Analyst Liz Bebb retained her ‘hold’ recommendation but reduced her target price to £18.30. The shares rose 20p to £17.21 yesterday.
‘Weaker trading conditions after the first half and resulting lower drop-through to the bottom line is not offset by cost reduction measures,’ she said.
‘We therefore reduce our earnings per share expectations for full-year 2015 and 2016 by 11-12%. We expect H2 2015 weakness to persist and have reduced segment profit expectations by 9% to £179 million, in line with management guidance.
‘For full-year 2016 estimates, organic growth is expected to be 1% to 1.5%, slightly below the level needed to offset underlying cost inflation; however, benefits from the cost restructuring program undertaken in H2 2015 are expected to offset the remaining inflation, leading to broadly flat margins year-on-year.’
23 November 2015 3:33am Numis analysts have reiterated a “hold” position for Spectris, due to a more difficult than expected second half, with underlying revenue down around 1.5 per cent year-on-year for 2015. Performance in China has held up, contrary to fears and there has been some positive momentum for new product launches. The target price has been lifted to 1,835p from 1,704p.
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