Spectris swings to profit in 2021 as demand recovers

ALN

<p>(Alliance News) - Spectris PLC said on Thursday it had swung to profit in 2021, despite a drop in revenue as Covid and supply chain issues hit sales conversion in the second half. <br /><br />The Egham, England-based supplier of precision instrumentation &amp; controls swung to a pretax profit of GBP388.6 million, from a loss of GBP4.1 million in 2020. Basic earnings per share were 305.1 pence, up from a loss of 14.6p the year before.<br /> <br />Spectris reported revenue in 2021 of GBP1.29 billion, down 3.3% year-on-year from GBP1.34 billion. <br /><br />Supply chain challenges hit sales growth somewhat in the final quarter, which grew by 2% over the previous year, compared to the average of 10% growth for the full-year. The Omicron wave in the fourth quarter and supply chain issues in the second half constrained the conversion of orders into revenue, with some orders to be carried through into 2022. <br /><br />Spectris reported strong demand from customers in the year with orders 19% higher on a like-for-like basis. Its operating margin grew by 320 basis points to 16% from 13% the year before. Like-for-like sales recovered to within 2% of pre-pandemic 2019 levels. <br /><br />In 2022, Spectris said orders and sales were both strong in January, and it is making good progress to return to and exceed its previous adjusted operating margin high of 18%. As a "more focused, less complex, asset-light, highly cash generative" business, it is also considering merger &amp; acquisition opportunities, it said.<br /><br />It proposed a final dividend of 48.8p per share, up 5% year-on-year, to a total of 71.8p for the year. This is down from 111.6p in 2020, which saw an additional dividend. <br /><br />Spectris' share price was down 7.6% to 2,996.00 pence each in London on Thursday afternoon.<br /><br />Chief Executive Andrew Heath said: "We delivered a good financial performance in 2021 and have made significant progress in executing our strategy for profitable growth, thanks to the hard work of the whole Spectris team. <br /><br />"Demand for our products and services has been strong, and although supply chain and Covid challenges somewhat constrained our ability to maximise sales in the fourth quarter, we entered 2022 with a record order book, and a strong start to the year. This gives us confidence in our ability to deliver continued good sales growth this year, noting the ongoing supply chain challenges."<br /><br /><br />By Elizabeth Winter; elizabethwinter@alliancenews.com<br /><br />Copyright 2022 Alliance News Limited. All Rights Reserved.</p>