2016 full year results

14/02/2017

14 February 2017 - Spectris plc (SXS: LSE), the productivity-enhancing instrumentation and controls company, announces full year results for the twelve months ended 31 December 2016.

Adjusted* 2016 2015 Change Change at CER** Like-for-like change*
Reported sales, £m 1,345.8 1,190.0 13% 1% -2%
Adjusted operating profit, £m* 200.8 181.1 11% -2% -6%
Adjusted profit before tax, £m* 195.8 176.3 11%    
Adjusted earnings per share, pence* 127.5p 114.3p 12%    
Adjusted return on sales, %* 14.9% 15.2% -0.3pp    
Dividend, pence 52.0p 49.5p 5%    
Reported          
Reported sales, £m 1,345.8 1,190.0 13%    
Reported operating profit, £m*** 38.3 143.6 -73%    
Reported profit before tax, £m*** 31.9 141.6 -77%    
Basic earnings per share, pence*** 8.6p 95.6p -91%    
Reported return on sales, %*** 2.8% 12.1% -9.3pp    

 

*The adjusted performance measures represent the statutory results excluding certain non-operational items. Like-for-like ('LFL') measures include revenue and profit at constant exchange rates and exclude the impact of acquisitions. For a definition of the item and a reconciliation to the closest IFRS equivalent, see Note 2.
** At constant exchange rates ('CER') using the prior period’s exchange rates.
***Main adjusting item to reported profit is the £115 million impairment charge referred to in the Highlights below which also reduces EPS by 96.8 pence

 

Highlights

  • - 13% growth in reported sales; 1% sales growth at constant exchange rates; 2% LFL sales decline
  • - Adjusted operating margins broadly stable; strong operating cash conversion of 113%; dividend per share increase of 5%
  • - Reported profit includes a non-cash charge of £115 million relating to an impairment of goodwill and other intangibles at Omega Engineering and ESG Solutions, reducing EPS by 96.8 pence
  • - Good strategic progress in transition to customer-focused, solutions strategy
    • - Acquisition of Millbrook brings high quality test service platform, expanding our automotive offering
    • - Added further software, service and testing capability
    • - Merger of Malvern and PANalytical to deliver a more complete range to a broader set of markets and customers
    • - Project Uplift further supports delivery of our strategy; expected to deliver £35 million of recurring savings at a cost of £45 million over the period to end 2019; net P&L charge of £14 million in 2017

 

Commenting, John O’Higgins, Chief Executive, said: "The year ended well with LFL sales growth in the final quarter following challenging trading conditions in the first three quarters. We continue to make good strategic progress as we transition our customer offering from the supply of products towards the provision of solutions encompassing hardware, software and services, responding to our customer’s needs. As customers increasingly require an integrated solution, we are strategically positioning Spectris to align with their needs and this is transforming our business.

We added further software and service capability to the Group in the acquisitions made during the year, the most significant being Millbrook, a high quality automotive test services platform which enables us to expand our offering to automotive customers in conjunction with our existing products and software. We also took the decision to merge two of our larger operating companies, Malvern Instruments and PANalytical, enabling a more collaborative approach across the customers served by both companies.

We launched Project Uplift, a key enabler in the delivery of our strategy, aimed at reducing complexity, increasing efficiency and effectiveness and freeing up resources to stimulate growth.

End-market growth in the near-term is expected to be modest. However, the evolution now underway within Spectris is an exciting time for the business and will further enable and support delivery of our solutions strategy."

Contacts:

Spectris plc
John O’Higgins, Chief Executive
+44 1784 470470

Clive Watson, Group Finance Director
+44 1784 470470

Siobhán Andrews, Head of Corporate Affairs
+44 1784 470470

FTI Consulting
Richard Mountain / Susanne Yule
+44 203 727 1374

A meeting with analysts will be held at 8:30 am GMT today. This will be available as a live webcast on the company’s website at www.spectris.com, commencing at 8.30 am GMT, and a recording will be posted on the website shortly after the meeting.

Copies of this press release are available to the public from the registered office at Heritage House, Church Road, Egham, Surrey TW20 9QD, and on the company’s website at www.spectris.com.

About Spectris

Spectris plc is a leading supplier of productivity-enhancing instrumentation and controls. The Company’s products, technologies and services enable customers to improve product quality and performance, improve core manufacturing processes, reduce downtime and wastage and reduce time to market. Its global customer base spans a diverse range of end user markets. Spectris operates across four business segments which reflect the applications and industries it serves: Materials Analysis, Test and Measurement, In-line Instrumentation and Industrial Controls. Headquartered in Egham, Surrey, England, the Company employs around 8,900 people, with offices in more than 30 countries. For more information, visit www.spectris.com.