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Investing.com -- Spectris (LON:SXS) plc, the precision measurement specialist, on Thursday reported an 8% increase in first-half sales and maintained its full-year profit guidance despite mixed market conditions.
The company, which is currently the target of a recommended £41.75 per share acquisition offer from KKR, delivered 1% like-for-like (LFL) sales growth with significantly improved momentum in the second quarter.
Sales reached £636.1 million in the first half, with second-quarter LFL growth accelerating to 9% after an 8% decline in the first quarter. Adjusted operating profit rose 7% to £65.6 million, while adjusted operating margin held relatively steady at 10.3%, down 10 basis points YoY.
The company’s Profit Improvement Programme has already delivered more than £10 million in savings during the first half, with over £30 million expected for the full year. Two-thirds of these savings are anticipated in the second half of 2025.
"We have transformed the Group since 2018 into a portfolio of high-quality businesses with attractive growth and margin profiles, positioning Spectris for sustained success," said Andrew Heath, CEO. "Our expectations for 2025 are supported by an improving sales outlook and order momentum, along with the expected benefits from recent acquisitions and efficiency programs."
Order intake grew 5% on a reported basis (-2% LFL), with 15% growth in the second quarter (4% LFL). The company’s book-to-bill ratio stood at 1.02x for the period, indicating a healthy demand environment.
By division, Spectris Scientific performed strongly with sales up 21% on a reported basis and 3% LFL, while Spectris Dynamics sales were flat on a reported basis and down 3% LFL. Academic research (10% LFL growth), life sciences (7% LFL growth), and materials (6% LFL growth) showed strength, while automotive and semiconductor markets declined 10% each.
Cash conversion was robust at 126% on an adjusted basis, up from 111% in the first half of 2024. The company expects to return its leverage ratio to within its 1-2x target range by year-end from the current 2.3x level.
The Board declared an interim dividend of 28.0 pence per share, a 5% increase from the prior year, which is included in KKR’s recommended acquisition offer of £41.75 per share announced on August 5.