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Spirax-Sarco Says H1 Sales Up 8%, Trading Conditions Positive; Shares Up - Update

(RTTNews) - Tuesday, Spirax-Sarco Engineering Plc (SPX.L), a manufacturer of boiler and pipeline control valves for steam handling, said sales for the first-half ended June 30 increased 8% at constant currency, including a 2% contribution from acquisitions, and added that trading conditions continue to be positive since its Annual General Meeting. Spirax-Sarco shares rose more than 7% in morning trade.

The Cheltenham, Gloucestershire-based company stated that growth continues to be led by Watson-Marlow Pumps and in the steam business by Americas and Asia Pacific, with Europe, Middle East and Africa or EMEA mixed but overall flat. In the first half, exchange movements have been favorable and added 2% to sales on translation versus average exchange rates in the prior-year period.

On an adjusted basis, operating profit margin for the six-month period is estimated to be above 19%, as compared with 15% last year. Spirax-Sarco said it has benefited from operational gearing from the growth in sales, previous year's cost reduction measures, small exchange gains and a favorable product mix.

Adjusted results exclude amortisation of acquisition-related intangible assets and an GBP 8 million exceptional revaluation gain following the May 25 acquisition of Spirax-Sarco's partners' 51% shareholding in Spirax-Sarco's Mexican business.

"Material costs have also been favourable but are rising and we anticipate this impacting the second half of the year. We are also increasing our investment in new product development and in market development to enhance our future growth prospects," said the company.

The group expects to announce its first half results on August 24, 2010.

SPX is currently trading on the London Stock Exchange at 1,464.00 pence per share, up 106.00 pence or 7.81%, on a volume of 36,822 shares. In the past 52-week period, the stock traded in a range of 809.00 pence to 1,591.00 pence, with a three-month average volume of 118,858 shares.