20 February 2020 – Spectris plc (SXS: LSE), the expert in providing insight through precision measurement, announces full year results for the twelve months ended 31 December 2019.
Executing our Strategy for Profitable Growth
- – Sales of £1,632.0 million, reflecting a 0.4% LFL sales increase
- – Adjusted operating profit increased 3.7%, on a LFL basis, to £258.1 million
- – Adjusted operating margin of 15.8%, a 50-basis point expansion on a LFL basis
- – Improved adjusted cash flow conversion of 91%; net cash of £33.5 million at year end
- – Adjusted earnings per share up 1.9%, dividend per share increase of 6.7%
- – Profit improvement programme delivered annualised benefits of £25.5 million, restructuring costs totalled £52.2 million; activities to continue into 2020
- – Further restructuring as part of the strategic review, leading to a non-cash charge of £35.1 million relating to an impairment of goodwill and £47.1 million relating to other intangibles, mostly recorded at the first half results
- – Divestment of BTG Group completed and sale of EMS Brüel & Kjær joint venture agreed
- – Proposed £175 million special dividend and share consolidation
| 2019 | 2018 | Change | Like-for-like change1 | |
| Adjusted1 | ||||
| Sales (£m) | 1,632.0 | 1,604.2 | 1.7% | 0.4% |
| Operating profit (£m) | 258.1 | 248.3 | 3.9% | 3.7% |
| Operating margin (%) | 15.8% | 15.5% | 30bps | 50bps |
| Profit before tax (£m) | 247.4 | 241.4 | 2.5% | |
| Earnings per share (pence) | 168.0p | 164.9p | 1.9% | |
| Adjusted cash flow conversion (%) | 91% | 59% | 32pp | |
| Return on gross capital employed (%) | 13.5% | 13.7% | (20bps) | |
| Statutory | ||||
| Sales (£m) | 1,632.0 | 1,604.2 | 1.7% | |
| Operating profit (£m) | 84.3 | 176.4 | (52.2%) | |
| Operating margin (%) | 5.2% | 11.0% | (580bps) | |
| Profit before tax2 (£m) | 259.3 | 218.0 | 18.9% | |
| Basic earnings per share (pence) | 202.2p | 157.6p | 28.3% | |
| Dividend per share for the year (pence) | 65.1p | 61.0p | 6.7% |
1. Alternative performance measures (‘APMs’) are used consistently throughout this press release and are referred to as ‘adjusted’ or ‘like-for-like’ (‘LFL’). These are defined in full and reconciled to the reported statutory measures in Note 2 to the Financial Statements.
2. The main adjusting items to statutory profit before tax in 2019 and 2018 were profits on disposal of businesses of £204.7 million and £56.3 million, respectively.
Commenting on the results, Andrew Heath, Chief Executive, said: “2019 saw demonstrable progress in executing our Strategy for Profitable Growth. The successful delivery of our profit improvement programme, combined with an increased emphasis on deploying the Spectris Business System, enabled us to deliver increased profit and operating margin expansion, against a weakening macroeconomic backdrop. Cashflow improved significantly in the year and we successfully completed the sale of BTG and announced the sale of the EMS Brüel & Kjær joint venture. Additionally, we have announced a special dividend of £175 million, in line with our capital allocation policy. 2019 has been a year of delivery upon which to build in 2020. We are intent on further improving our operating margin, to at least previous highs, and enhancing capital returns, as we continue to work on asset optimisation and managing the portfolio.
Absent a material impact from coronavirus, for 2020, we anticipate that markets will remain challenging in the first half with a recovery only currently forecasted to emerge later in the year. We expect limited top-line growth and will, therefore, continue to concentrate on self-help initiatives to drive further cost-efficiency and ensure a more resilient and profitable business.
The combination of focusing on our customers, driving operating leverage and the repositioning and simplification of our portfolio, alongside a refreshed capital allocation framework, form the basis for delivering a significant and sustainable increase in shareholder value.”
Contacts:
Spectris plc
Siobhán Andrews
Head of Corporate Affairs
+44 1784 485325
FTI Consulting
Richard Mountain/Susanne Yule
+44 203 727 1340
A meeting with analysts will be held at 8:30am GMT today at the offices of FTI Consulting. This will be available as a live webcast on the company’s website at www.spectris.com and a recording will be posted on the website after the meeting. Copies of this press release are available to the public from the registered office at Heritage House, Church Road, Egham, Surrey TW20 9QD and on the Company’s website at www.spectris.com.
About Spectris
Spectris’ global group of businesses are focused on delivering value beyond measure for all our stakeholders. We target global, attractive and sustainable markets, where growth and high returns are supported by long-term drivers. Precision is at the heart of what we do. We provide customers with expert insight through our advanced instruments and test equipment, augmented by the power of our software and services. This equips customers with the ability to reduce time to market, improve processes, quality and yield. In this way, Spectris know-how creates value for our wider society, as our customers design, develop, test and manufacture their products to make the world a cleaner, healthier and more productive place. Headquartered in Egham, Surrey, United Kingdom, the Company employs approximately 9,000 people located in more than 30 countries. For more information, visit www.spectris.com.