Spirax-Sarco Engineering steams ahead
1 min read
Steam systems specialist Spirax-Sarco Engineering reported improvements in sales and profits and said today that it had seen an improvement in trading conditions although Europe's recovery remained "fragile and mixed". It had made good progress implementing a global manufacturing strategy which is expected to yield cost savings that will begin in 2011 and build to full savings of about £4 million a year in 2012.
The Cheltenham-based group's Watson-Marlow pumps operation had seen general improvements in nearly all market areas and across the product range, especially in tubing which was now being supplied from a new extrusion plant in Falmouth that was opened at the end of last year.
The consolidation of manufacturing in Cheltenham, England from three sites down to one had been progressing well and the company anticipates completing the relocation of most of itsr assembly and testing operations by year end, with the balance of the main machinery moves finalised in early 2011 when the restructuring of the French manufacturing plant will also be completed. A new facility opened in Shanghai in June, relocating existing sales, production and warehousing was preparing the way for the planned expansion of production in China.
Commenting on the company's half year results, chief executive Mark Vernon said: "We have seen an improvement in trading conditions as our markets recover from the recession in 2009."
The second half of the year had started well and although Spirax-Sarco remained alert to the uncertain momentum of global economic activity and to unfavourable exchange rate movements, it expected to make good progress for the full year and to see a more normal second-half bias of sales and profits.
Sales in the half year were £277 million, up 10% from the £251.6 million achieved in 2009, while pre-tax profit increased by 44% from £38.2 million to £54.9 million.
The company said global economic activity and industrial production output had been recovering this year from the recessionary levels in 2009, although recent indicators suggested a slowing of growth in industrial output from the relatively rapid pace of earlier months. However, the broad recovery remained patchy across most markets with the strongest market conditions in Asia and in Latin America. Growth in North America had slowed in the past quarter and the economic recovery in Europe appeared fragile and mixed.
