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Introduction
Spectris made good progress in the first half of 2007, with sales, profits and operating margins all improving compared with the corresponding period in the prior year. At constant currencies, sales increased by 7.6%, including 1.2% from bolt-on acquisitions, and operating profit increased by 43%. Sales at actual exchange rates increased by 1.7% to £308.7 million. This reflects the strength of sterling, which has increased by 10% against the US dollar and 14% against the Japanese yen compared with the same period last year. Operating profit at actual exchange rates increased by 26% to £39.4 million. Margins improved to 12.8% (2006: 10.3%), reflecting the benefits from the increase in volume and the restructuring actions taken in 2006.
Geographically, sales in Europe increased by 9% at constant currencies. Organic sales in North America grew by 6% at constant currencies. Asia grew by 4% at constant currencies, with good growth in China and Japan offset by fewer large projects in other parts of the region. Sales in the rest of the world increased by 15%.
Cash generation continues to be a focus and remained strong in the first half with 93% of operating profit converted to operating cash. The previously announced disposal programme was concluded in the first half, with the sale of the Ircon business to Fluke Electronics Corporation on 15 June. This followed the sale of Spectrum Inspection Systems to Illinois Tool Works Inc on 28 February.