Spirax-Sarco Regulatory News (SPX)

8 Jan 2010 07:00



Friday 8th January 2010 [embargoed until 7.00 a.m.]

TRADING UPDATE

Spirax-Sarco Engineering plc, the world leader in the control and efficient use of steam and in peristaltic pumping, issues the following update in respect of its trading for the year ended31st December 2009.

Following improving year-on-year comparisons in the last few months and good project shipments in December, sales for 2009 increased 3% from 2008, including a small contribution from acquisitions and an exchange benefit of 10%.

Trading margins in the second half year benefited from lower material costs and management action to reduce operating costs, in addition to the usual positive seasonal second half bias from slightly higher sales volume. Trading margin for the full year, excluding headcount reduction costs referred to below, is expected to be broadly similar to the 17.1% achieved in 2008. Pre-tax profits for 2009 on that basis are therefore expected to be above the top of the current range of analysts' forecasts.*

Extending our cost reduction actions announced early in 2009, we are also reducing the manufacturing footprint at our French factory. As a result, the total headcount reduction costs to be taken in 2009 are now expected to be around £11m, with further efficiency gains in 2010 and future years; about £4m of this one-off cost will be a cash outflow in 2010.

The Group finished 2009 with a small net cash balance, despite funding the acquisitions of MasoSine and Intervalf this year for a combined £25m, and the high capital investment in more efficient manufacturing processes and capacity expansion, particularly in developing markets.

In 2010, we expect a small currency headwind and also plan to reinvest some of the cost savings in stepping up our investment in product development, expanding our market penetration and improving operating efficiency.

Preliminary results for the year ended 31st December 2009 are expected to be announced on 4th March 2010.

* Analysts' forecasts for pre-tax profit, excluding exceptional costs and amortisation of acquisition-related intangibles, as at 7th January 2010 as disclosed by Thomson Reuters were in the range £78.4m to £85.0m.

Enquiries:

Mark E Vernon, Chief Executive

David Meredith, Director Finance

Tel: 01242 535234

About Spirax Sarco

Spirax-Sarco Engineering plc is the world leader in both steam system management and peristaltic pumping. The Company provides a broad range of fluid control products, engineered packages, site services and systems expertise for its diverse range of over 100,000 industrial and institutional customers. The Company helps its customers to optimise production capacity, reduce energy costs and emissions, improve product quality and enhance the safety of their operations. Spirax Sarco is headquartered in Cheltenham, England, has strategically located manufacturing plants around the world and employs approximately 4,200 people, of whom 1,200 are direct sales and service engineers. Its shares have been listed on the London Stock Exchange since 1959 (symbol: SPX). Further information can be found at www.spiraxsarcoengineering.com