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Spirax-Sarco Engineering PLC on Thursday said its first-half profit declined, and it warned of continued destocking, hurting sales to the pharmaceutical and biotechnology sectors. The Cheltenham, England-based thermal energy management and pumping company said pretax profit fell 18% to £114.0 million, from £138.5 million a year ago. Operating costs rose 18% to £718.6 million, while financial expenses jumped to £22.3 million from £5.5 million. The firm reported revenue of £850.8 million in the first half of 2023, up 13% from £750.1 million the year prior. The company said revenue was boosted by a 1.5% currency tailwind, as well as a 10% contribution from newly-acquired Vulcanic and Durex industries. Spirax warned destocking in Biopharm, which refers to sales from the Watson-Marlow division to pharma and biotech, ‘is now expected to continue into 2024’. In 2022, Biopharm sales accounted for 60% of Watson-Marlow’s sales in 2022. Spirax-Sarco lifted its interim dividend by 8.0% to 46.0 pence per share, from 42.5p a year prior, which the firm said reflects its confidence in its medium and long-term outlook. Looking ahead, the company said it expects its revenue group sales to be between flat and 4% higher for the year, when compared to 2022’s pro-forma sales of £1.73 billion. Back in a May trading update, it predicted ‘double-digit sales growth for the group in 2023, representing mid-single-digit sales growth over 2022 pro-forma sales’. ‘While our guidance for the remainder of the year reflects the short-term challenges of predicting the precise timing and scale of the return to growth in the Biopharm and Semicon WFE sectors, we remain confident in the strong underlying medium and long-term growth drivers for both sectors,’ it said. Chief Executive Nicholas Anderson added: ‘We achieved first half results that are broadly in line with our expectations, against the backdrop of continued destocking in the Biopharm and Semicon WFE sectors, as well as softening industrial production growth.’ Spirax-Sarco shares fell 5.9% to 10,200.00 pence each on Thursday morning in London. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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