Gloucestershire engineering firm Spirax Group has reported growth ahead of its first half despite a “weak macroeconomic backdrop”. The Cheltenham-based company, formerly known as Spirax-Sarco, said its full-year outlook for the year remained unchanged.
For the 10 months ended October 31, group organic sales growth at the firm was ahead of H1. Sales were also above the previous year in all three businesses, excluding currency effects.
However, the firm said industrial production (IP) growth remained weak through the third quarter, with IP in its key geographic markets lower than was forecast at the time of the company’s first-half results in August.
Following downward revisions to second half IP expectations in Europe and North America, Spirax said the full-year forecast for global IP (excluding China) was now 0.9%, down from 1.5% in August. It added that macroeconomic conditions in China continue to “remain challenging”.
“Against this weak macroeconomic backdrop, we have continued to focus on driving organic sales growth and preserving our adjusted operating profit margin,” the company said in a statement.
Net borrowings, excluding leases, at October 31 was £642m – down from £718m on June 30. The group said it expected mid-single digit organic revenue growth for the full year and an adjusted operating profit margin broadly in line with the 2023 margin of approximately 20.0% (adjusted for currency headwinds).
If exchange rates at the end of October prevail, the headwind impact across the full year would be approximately 1% greater on both sales and adjusted operating profit than expected at the time of the company’s first-half results in August, the firm added.