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Spirax-Sarco Engineering PLC on Thursday declared a higher interim dividend despite reporting a lower profit due to manufacturing input cost rises.
The FTSE 100 listing is a Cheltenham, Gloucestershire-based thermal energy management and pumping company.
Pretax profit in the half-year to June 30 fell to £138.5 million from £150.0 million a year ago. Revenue grew 17% to £750.1 million from £643.7 million, but this increase was more than offset by widening costs due to inflation.
‘The ongoing disruptions to global supply chains have led to reduced availability of key components and manufacturing input cost inflation,’ the company said.
‘We are monitoring macroeconomic risks, such as increased material and labour costs, energy cost inflation and changes to the interest rate environment. We are mitigating these risks through our embedded processes to manage key margin drivers such as our price management practices.’
Investments in future organic growth narrowed its adjusted operating profit margin, Spirax-Sarco said, slipping to 24% from 25%.
‘We continue to be confident in our group's resilience and ability to navigate the current uncertain macroeconomic climate,’ Spirax-Sarco said.
‘This is underpinned by our robust business model, our proven price management practices to offset inflation, record order books, ramp-up of our manufacturing capacity to meet customer needs and our ongoing mitigation of disruption caused by the global supply chain and Covid-19 impacts on our workforce.’
The company declared a 42.5 pence per share interim dividend, up 10% from 38.5p a year ago.
Spirax-Sarco shares rose 0.8% to 12,100 pence each in London on Thursday morning.
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