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Spirax Group plc (LSE:SPX) has announced its half-year results for 2024, reflecting a modest 1% organic revenue growth despite a challenging macroeconomic environment. The Group faced varied performance across its divisions, with notable impacts from currency fluctuations and evolving market dynamics.
Performance Overview
For the six months ending 30 June 2024, Spirax’s global Industrial Products (IP) division saw a subdued growth rate of 0.8% when excluding China. This reflects broader market softness and competitive pressures in key regions. The Steam Technology Solutions (STS) division, which had a robust performance in the first half of 2023, experienced a 1% decline in sales organically. This decline is attributed to tough comparators from the previous year.
In contrast, the Environmental Technology Solutions (ETS) division demonstrated a more positive performance, achieving a 5% organic growth. This increase was bolstered by operational improvements and stable demand in the semiconductor sector. The Watson-Marlow division, specializing in biopharmaceuticals, recorded a 3% organic growth, indicating early signs of a rebound in demand.
Financial Highlights
The adjusted operating profit margin improved in the ETS division, but this was offset by a reduced margin in STS. Overall, the statutory operating profit and margin showed an increase, benefiting from a more favorable comparison to 2023, which was affected by restructuring and write-down charges.
However, the Group faced significant currency headwinds, which impacted revenue and adjusted operating profit. Specifically, currency fluctuations led to a 4% reduction in revenue and a 6% decrease in adjusted operating profit.
Cash Conversion and Dividend
Adjusted cash conversion stood at 53% for the first half of 2024, which aligns with the typical seasonality of Spirax’s operations. The Group has proposed an interim dividend of 47.5 pence per share, marking a 3% increase from the previous year, reflecting a commitment to shareholder returns despite challenging conditions.
