Global engineering firm’s profits hit by tough economic conditions

Engineering firm Spirax Sarco said its annual results continued to be hampered by the challenging international economy.

Revenues at the Cheltenham business were up four percent reflecting full-year contributions from acquisitions but were  down one per cent organically.

Revenues increased to £1.6bn while operating profit fell by 11 per cent to £284m.

Group organic revenue growth in the first half of the year was offset by a decline in the last six months, driven by a weakening IP outlook

Early restructuring actions and cost containment partially mitigated margin impact, particularly in the second half

Group chief executive Nimesh Patel said: “Our financial results in 2023 were impacted by a more challenging trading environment than we had anticipated at the start of the year, with a number of external headwinds to our highest margin businesses.  An early focus on restructuring to right-size capacity, together with cost containment actions, supported our adjusted operating profit margin.  We are well positioned to return to revenue and profit growth in 2024.

“It is a privilege to lead Spirax Group, working alongside outstanding people to continue building on the strengths of our unique business model.  We have a long track record of navigating volatile macroeconomic conditions to deliver growth ahead of industrial production.

“Our decision to maintain revenue investment in critical strategic initiatives, such as further developing our digital and decarbonisation capabilities, will support the delivery of compounding growth at attractive margins for many years to come.”  ^]fluid technology solutions improve operating efficiency and safety in our customers’ critical industrial processes.

“Our recently launched new-to-world decarbonisation solutions use proprietary technologies to electrify boilers, for the raising of steam, as well as the electrification of other critical industrial process heating applications.”

Spirax Group is headquartered in Cheltenham. The firm has 37 strategically located manufacturing plants around the world  and the Company’s shares have been listed on the London Stock Exchange since 1959.