REG - Spirax Group PLC - 2025 Half Year Results
Tue 07:00
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RNS Number : 8675U Spirax Group PLC 12 August 2025
12 August 2025
2025 Half Year Results
Trading in line with expectations; reiterating full year guidance
Six months ended 30 June
Statutory (£m/p) 2025 2024 Reported
Revenue(1) 822.2 827.0 (1)%
Operating profit 106.8 147.2 (27)%
Operating profit margin 13.0% 17.8% (480)bps
Profit before taxation 87.9 124.8 (30)%
Basic earnings per share 85.0 123.8 (31)%
Dividend per share 48.9 47.5 3%
Adjusted(6) (£m/p) 2025 2024 Reported Organic(4)
Revenue(1) 822.2 827.0 (1)% 3%
Adjusted operating profit 158.8 160.3 (1)% 7%
Adjusted operating profit margin 19.3% 19.4% (10)bps 70bps
Adjusted profit before taxation 139.9 137.9 1%
Adjusted basic earnings per share 137.6 137.2 -
Adjusted cash conversion 61% 53% 800bps
● Group revenue up 3% organically and ahead of global IP(2) of 2.5% (IP
excluding China: 1.7%)
● STS(3) sales in line with H1 2024 organically and up 3% excluding large
projects in China and Korea
● ETS(3) sales up 10% organically driven by further operational progress and
improved Semicon(5) demand
● WMFTS(3) sales up 2% organically; over 10% Biopharm(5) orders growth to drive
higher H2 sales growth
● Group adjusted operating profit up 7% organically; margin of 19.3% up 70bps
organically
● Statutory profit and margin of 13.0% impacted by one-off restructuring costs
and currency headwinds
● Currency headwinds to revenue (3%) and adjusted operating profit (7%), as
expected
● Improved adjusted cash conversion of 61% reflects capital discipline and
working capital efficiency
● Interim dividend up 3% to 48.9 pence
Nimesh Patel, Group Chief Executive Officer, commenting on the results said:
"We have delivered first half results in line with expectations despite the
challenging macroeconomic environment, demonstrating the strength of the
Group's direct sales Business Model. Our focus on driving demand in MRO and
solution-sales across STS and WMFTS Process Industries, together with
increased manufacturing throughput in ETS, delivered organic sales growth
ahead of IP.
"While IP forecasts have been revised down for the remainder of the year, our
unchanged full year guidance is supported by strong order books going into the
second half, increasing demand from key end markets, and ongoing delivery of
operational priorities.
"Colleagues across the Group have successfully stepped up focus on the drivers
of growth within our control as we implement our Together for Growth Strategy
at pace. Our significant operational efficiency and simplification programme
is funding investment in future drivers of accelerated and sustained longer
term growth, including digital and decarbonisation, whilst also underpinning
our confidence in delivering our medium-term targets."
(1) 'Sales' is used interchangeably with 'revenue' when describing the
financial performance of the Group
(2) 'IP': Industrial Production growth
(3) 'STS': Steam Thermal Solutions; 'ETS': Electric Thermal Solutions;
'WMFTS': Watson-Marlow Fluid Technology Solutions
(4) Organic measures are at constant currency and exclude contributions from
acquisitions and disposals
(5) 'Biopharm': Pharmaceutical & Biotechnology customers; 'Semicon': Wafer
Fabrication Equipment manufacturers
(6) See Appendix to the Financial Statements for an explanation of alternative
performance measures and reconciliation to IFRS
For further information, please contact:
Louisa Burdett, Chief Financial Officer: +44 (0) 1242 240281
Mal Patel, Head of Investor Relations: +44 (0) 1242 240281
Media
Martin Robinson, Teneo: +44 (0) 20 7260 2700
spiraxgroup@teneo.com (mailto:spiraxgroup@teneo.com)
Audio cast
The results presentation will be available as a live audio cast from 9.15 am
on the Company's website at spiraxgroup.com
(http://www.spiraxsarcoengineering.com) or via the following link:
https://edge.media-server.com/mmc/p/bzjsi944/
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A recording will be made available on the website shortly after the meeting.
About Spirax Group plc
Spirax Group is positioned to play a critical role in enabling the industrial
transition to net zero, aligned to our Purpose to create sustainable value for
all our stakeholders as we engineer a more efficient, safer and sustainable
world. We put solving customers' problems at the heart of our total
solutions approach. Our global thermal energy and fluid technology solutions
improve operating efficiency and safety in our customers' critical industrial
processes. Our new-to-world decarbonisation* solutions will use our
proprietary technologies to electrify boilers, for the raising of steam, as
well as the electrification of other critical industrial process heating
applications.
Spirax Group comprises three strong and aligned Businesses: Steam Thermal
Solutions helps customers control and manage steam within their mission
critical industrial applications, such as cleaning, sterilising, cooking and
heating. We are helping to put food safely on the world's tables and keeping
our hospitals running. Electric Thermal Solutions has proprietary technologies
that deliver electrification solutions at scale in industrial settings,
including for the raising of steam, supporting our customers to achieve their
net zero goals. We also deliver freeze protection and defrost solutions
critical to aviation and space industries and ensure thermal uniformity in
Semiconductor chip manufacturing to power the critical electronic systems we
rely on. Watson‐Marlow Fluid Technology Solutions is engineering vital
fluid technology solutions that optimise the efficient use of resources and
support advancements in global health, such as lifesaving vaccines and gene
therapies.
Spirax Group is headquartered in Cheltenham (UK). We have over 30
strategically located manufacturing plants around the world and are committed
to creating a safe and inclusive working culture for our 10,000 colleagues,
operating in nearly 70 countries and serving over 100,000 customers
globally.
The Company's shares have been listed on the London Stock Exchange since 1959
(symbol: SPX) and we are a constituent of the FTSE 100 and the FTSE4Good
Indexes.
* Eliminates Scopes 1 and 2 greenhouse gas emissions when connected to a green
electricity source.
Further information can be found at spiraxgroup.com
(http://www.spiraxsarcoengineering.com)
RNS filter: Results
LEI 213800WFVZQMHOZP2W17
SUMMARY FINANCIALS
Six months to 30 June H1 2025 H1 2024 y-o-y change
£m £m Organic* Reported
SUMMARY FINANCIALS
Steam Thermal Solutions (STS) 414.2 430.8 - (4)%
Electric Thermal Solutions (ETS) 212.3 197.7 10% 7%
Watson-Marlow Fluid Technology Solutions (WMFTS) 195.7 198.5 2% (1)%
Group Revenue 822.2 827.0 3% (1)%
STS 66.2 98.6 (33)%
ETS 17.8 20.1 (11)%
WMFTS 43.6 47.3 (8)%
Corporate (20.8) (18.8) 11%
Group Statutory Operating Profit 106.8 147.2 (27)%
STS 16.0% 22.9% (690)bps
ETS 8.4% 10.2% (180)bps
WMFTS 22.3% 23.8% (150)bps
Group Statutory Operating Profit Margin 13.0% 17.8% (480)bps
STS 97.0 101.2 3% (4)%
ETS 31.8 29.1 12% 9%
WMFTS 50.6 48.8 12% 4%
Corporate (20.6) (18.8) 9% 10%
Group Adjusted Operating Profit* 158.8 160.3 7% (1)%
STS 23.4% 23.5% 60bps (10)bps
ETS 15.0% 14.7% 30bps 30bps
WMFTS 25.9% 24.6% 240bps 130bps
Group Adjusted Operating Profit Margin* 19.3% 19.4% 70bps (10)bps
Cash flow
Statutory cash from operations 97.5 93.1 5%
Adjusted cash from operations* 97.0 85.6 13%
Adjusted cash conversion* 61% 53% 800bps
Net debt* 658.0 718.3 (8)%
Leverage (net debt to EBITDA)* 1.8x 1.9x
* See Appendix to the Financial Statements for an explanation of alternative
performance measures and reconciliation to IFRS
GROUP CHIEF EXECUTIVE OFFICER'S REVIEW
Summary of first half performance
Global industrial production growth (IP) during the first half was 2.5% or
1.7% excluding China. IP in key markets such as Germany, France, Italy and
the UK, contracted during the first half and IP in the USA remained weak.
Trading conditions in China remained challenging with customers reducing large
project expenditure. In Korea, customers temporarily deferred capital
investment decisions as a result of political instability.
Against this backdrop, we remained focused on the operational priorities
within our control, including driving growth through MRO and consultative
solution-selling across the Group, as well as delivering improvements in
manufacturing efficiency and throughput. We have also protected margins
against cost inflation and tariff impacts through continued pricing
discipline. Our restructuring is on track to deliver annualised benefits of
approximately £35 million, most of which we are reinvesting in our organic
growth initiatives.
Group organic sales growth of 3% was ahead of IP. Organic growth in adjusted
operating profit was 7% and the adjusted operating profit margin of 19.3% was
70bps higher organically. As expected, both sales and adjusted operating
profit were impacted by currency movements and were 1% lower than 2024.
STS sales were in line with the first half of 2024 organically, despite the
weak IP backdrop, with strong growth in MRO and solution-sales offset by the
anticipated weakness in large projects in China and Korea, both of which are
more exposed to customers' capital spending than other regions. Excluding
large project sales in China and Korea, STS organic sales growth was 3%,
demonstrating the success of our Commercial Excellence initiatives. STS
margin of 23.4% was up 60bps organically through delivery of manufacturing
efficiencies while preserving targeted investments in future growth drivers
such as digital and decarbonisation.
ETS organic sales growth of 10% was supported by double-digit demand growth.
In Process Heating, strong sales growth was delivered through continued
operational progress driving higher shipments from the large order book,
supplemented by a material contract win. Equipment Heating benefited from
improved Semicon demand. Operating leverage from sales growth, offset by
further shipments of legacy orders that have not been repriced for inflation
and pre-commissioning costs for the new Medium Voltage (MV) facility in Ogden,
delivered a 60bps improvement in ETS margin to 15.3%, before a one-off 30bps
exchange rate impact on balance sheet items arising from the sharp weakening
of the US dollar following US tariff announcements.
WMFTS organic sales growth was 2%, supported by growth in Process Industries
well ahead of IP and new order intake in Biopharm continuing to recover
strongly through the first half, driven by end-user and now also OEM
customers. Double-digit growth in orders was materially above sales growth.
For the first time since 2021 (peak COVID demand) orders now exceed sales,
which will underpin higher sales growth in the second half. WMFTS margin
expanded by 240bps organically, supported by ongoing manufacturing
efficiencies.
Alongside focusing on the execution of our Commercial Excellence and
Operational Excellence priorities, we continued to make progress in Health and
Safety and with our One Planet Sustainability Strategy. Our all-workplace
incident rate(1) (which includes lost time accidents) reduced by 12% from
2.31(1) at the end of 2024 to 2.03(1) in the first half of 2025. We continue
to make progress towards meeting our One Planet targets, including a reduction
in our absolute Scopes 1 and 2 market-based greenhouse gas emissions of 32%
compared to 2024 and an over 60% reduction compared to our 2019 baseline.
The Board has declared an Interim dividend of 48.9 pence (H1 2024: 47.5 pence)
per ordinary share representing 3% growth.
(1)per 100,000 work hours
Strategic Update
Our Together for Growth Strategy builds on our unique Business Model with
operational priorities that enhance our sales, manufacturing and
organisational effectiveness to meet our customers' evolving needs and drive
organic growth. Through leveraging the power of the Group, we are working
differently to deliver efficiencies that generate savings and improve our
margin. We are reinvesting savings in targeted areas to capture the
significant compounding organic growth opportunities we see ahead. Progress
during the first half is set out below.
Commercial Excellence
In STS, we continued to invest in headcount in our regional sales
organisations with a focus on higher growth sectors. This is driving MRO and
solution-sales, funded from customers' operational expenditure budgets as they
focus on improving productivity and reducing costs in their critical
processes. In China, double-digit MRO sales growth is partially offsetting
the impact of weaker demand for large projects that expand manufacturing
capacity, funded from customers' more constrained capital expenditure budgets.
In the USA, STS continued to advance our new approach of working with
distributors to drive co-generated demand in partnership with them by
leveraging our direct sales engineers' expertise in walking-the-plant and
generating solution-sales from new target customers. In the first half, we
implemented strategic growth plans with eight distribution partners, resulting
in demand growth from this group of 20% compared to last year. Direct sales
and co-generated opportunities now account for approximately 50% of total
demand in the USA.
In WMFTS EMEA, our sales engineers have historically been geographically
focused with responsibility across sectors. Following the reorganisation
completed earlier this year, our sales teams are now fully sectorised,
supported to develop deep expertise in their customers' processes and focused
on maximising opportunities from accounts with the highest potential. We have
also established a new Inside Sales team to serve smaller customers and fulfil
less complex orders. This has allowed our experienced sales engineers to
focus on increasing the frequency of customer visits and on driving
solution-sales.
Operational Excellence
Our focus during the first half has been on driving benefits from material
usage, procurement and labour productivity. The scale of the savings
realised is expected to offset most of the return of variable compensation
across the Group, after two years of lower payments.
We have continued to review our manufacturing footprint and product portfolio
to optimise what we make and where we make it. In STS, we completed the
closure of our facility in Mexico and transferred production to the USA.
Following the decision to pause the planned expansion of our Gestra facility
in Germany, we have also started a formal process to explore ways of achieving
greater efficiency and better performance through discussions with the local
Works Council.
In WMFTS, we are reorganising selected activities across our manufacturing
footprint to support regional growth, improve customer service, reduce
inventory and mitigate tariff barriers to trade. In this context we have
begun to assess the transfer of certain UK manufactured components to our USA
facility.
In ETS, we continue to drive efficiencies and operational improvements,
particularly in our Chromalox facility in Ogden (Utah, USA) where we are
successfully increasing manufacturing throughput. We have materially reduced
lead times, particularly through design engineering which was a historic
bottleneck. Our dedicated MV facility remains on track to be completed on
time and within budget.
Organisational Fitness
In the first half, we successfully implemented a simplification of our STS
EMEA organisational structure by consolidating the number of operating
companies to reduce management layers, without impacting our local direct
sales capability. We also consolidated technical sales and service capability
to be better leveraged across our operating companies. In ETS, the
establishment of a new organisational structure, comprised of three Sales
Divisions (Process Heating, Equipment Heating and Heat Trace), is driving
increased collaboration and alignment across brands and regions, as well as
new product development and customer engagement. In WMFTS, we completed the
move from a geographic focus to a sector-based sales model, to strengthen our
self-generated solution-selling capability.
Our restructuring is on track to deliver annualised savings of approximately
£35 million, of which half are expected to be delivered this year, weighted
to the second half. As planned, these savings are mostly being reinvested in
our organic growth priorities. The costs of delivery, most of which are
expected to be incurred in 2025, remain in line with our expectations.
Digital and Services
In the first half of 2025 we added a further 400+ customer sites to the 1,000
connected sites at the end of 2024. These connections are driving
pull-through revenues, especially when accompanied by system audits that allow
us to identify optimisation, replacement and repair opportunities. We also
continued to refine and develop our proprietary large language model-based
training tool, MiM. This tool, which is built using our unique application
knowledge to free up sales time, has now been deployed to over 100 sales
colleagues as we expand our sector-based content.
Decarbonising Thermal Energy
The decarbonisation of thermal energy in industrial processes is a significant
long-term growth opportunity for our Group, representing an additional annual
addressable market of close to £7 billion (as set out in our 2024 Capital
Markets Day). We are working with customers to optimise, manage and
ultimately decarbonise their production processes, through four go-to-market
strategies:
Steam and Condensate System Energy Optimisation and Electrical Energy
Optimisation
STS sales engineers are experts in identifying and solving inefficiencies in
steam and condensate loops, while ETS sales engineers meet the same need in
managing electrical energy, skills that underpin our unique competitive
advantage. This expertise is core to our customer value proposition and a
foundational part of our decarbonisation offer. Continued demand for energy
optimisation solutions is driven by our customers' focus on achieving cost and
sustainability goals. In STS, we are increasing the number of steam and
condensate loop audits undertaken at customer sites to identify and develop
these solutions, supported by our digital offerings such as steam trap
monitoring.
TargetZero
To electrify the generation of steam without compromising or changing
operational processes, we are developing our new-to-world TargetZero solutions
(SteamVolt, Electrofit, Steam Battery and High Temperature Heat Pumps) made
possible by our unique combination of steam and electric thermal energy
expertise. We have reached agreement with several global industrial Boiler
OEMs to incorporate our SteamVolt technology into their electric boilers, with
our first pilot solution installed at a regional Food & Beverage customer
facility and a second one planned for installation in a Chemical plant in the
second half. We continue to test and refine our Electrofit solution with a
global Food & Beverage customer at two production sites. We are also
progressing the development of High Temperature Heat Pump technology for the
generation of steam utilising waste process heat.
PoweringZero
In Process Heating (ETS), we have a leading competitive position in
incorporating electric thermal energy solutions into our customers' critical
processes, helping to replace the burning of fossil fuels. PoweringZero
solutions deliver customised Low Voltage (LV), and increasingly, Medium
Voltage (MV) heating solutions across a number of industries such as
industrial ovens in Food & Beverage, gypsum board manufacture in
Construction and tissue manufacturing in Pulp & Paper. Expansion into
new sectors such as energy storage, represents a significant new opportunity
for the application of these solutions. During the first half, we secured a
contract to design and supply MV heaters to a power generation customer for
its first renewables energy storage facility in the UK. Prototype higher
voltage and higher temperature heating elements, which have the scope to
expand our addressable market, are also in testing.
Integrated Thermal Energy Assessment
Customers recognise the depth of our steam and electric thermal expertise and
the value that our combined insights and solutions can deliver. During the
first half, we made progress in building our integrated thermal energy
assessment team of audit experts from across STS, ETS and Cotopaxi, with a
defined operating model and go-to-market strategy. We delivered multi-site
pilots for customers in our target sectors (Food & Beverage, Downstream
Petrochemicals, and Chemicals), validating customer appetite for a combined
and holistic review of their thermal energy needs.
Full year guidance
Market environment
In line with our cautious view on global IP in March, CHR's forecast for the
second half of 2025 has been revised down to 2.0% and excluding China to 1.7%.
Uncertainty around tariffs and the impact on global trade continues to dampen
business confidence and demand for large projects, particularly in China,
although we are beginning to see a moderation in the rate of decline in large
project orders. In Korea, following a return to political stability, we expect
trading conditions to improve from the second half and into 2026. Biopharm
and Semicon demand is expected to remain strong through the second half.
Exchange rates
Our organic growth guidance is based upon 2024 results as restated for the
impact of exchange rate movements in 2025. The currency headwinds we set out
in our trading update in May are expected to persist through the remainder of
the year, which would impact 2024 sales by approximately 3% to £1,615 million
and adjusted operating profit by approximately 6% to £314 million, leading to
an adjusted operating profit margin of 19.4%. Movements in exchange rates
are often volatile and unpredictable therefore the actual impact may be
different.
Restructuring
We remain on track to deliver annualised savings of approximately £35 million
from the organisational changes and consolidation of manufacturing facilities
that we began implementing in the first half. Half of these savings are
expected to be delivered in the current year, weighted to the second half.
Expected savings, net of reinvestment in future growth, are included in the
Group and Business adjusted operating profit and margin guidance.
We continue to expect approximately £35 million of cash costs and £5 million
of non-cash costs to deliver this restructuring most of which will be taken as
a restructuring charge in 2025, with the cash impact expected in 2025 and
2026. These costs are excluded from our adjusted operating profit and the
margin guidance above.
Full year outlook
Our Group guidance for the full year remains unchanged. We continue to
anticipate organic growth in Group revenues consistent with that achieved in
2024 and well ahead of IP. Group adjusted operating profit margin is
expected to be ahead of the currency adjusted 19.4% in 2024, driving
mid-single digit organic growth in adjusted operating profit.
We expect second half organic sales growth to accelerate. Second half growth
will be supported by shipments from the strong order books in STS and WMFTS
and continued sales momentum in ETS despite a materially stronger comparator
for the second half. This will result in a sales profile aligned with our
typical weighting towards the second half. Organic margin progress is also
expected to be greater than in the first half, driven by organic sales growth,
the drop-through from high margin Biopharm and Semicon sales and the phasing
of benefits from our restructuring.
We expect corporate costs to be approximately £40 million, net financing
costs to be approximately £40 million and an effective tax rate of 27%. We
expect cash conversion to continue to improve to above 80%.
Operating Review
Market environment
Industrial production growth (IP) 2024 2025
FY H1 H2 FY
Europe -0.3% 0.4% 2.0% 1.2%
North America -0.3% 0.8% 0.8% 0.8%
South America 0.0% 2.9% 0.9% 1.9%
Asia 3.1% 4.1% 2.5% 3.2%
Global 1.7% 2.5% 2.0% 2.2%
Global (excluding China) 0.8% 1.7% 1.7% 1.7%
Source: CHR Economics July 2025
Global industrial production growth (IP) during the first half was 2.5% or
1.7% excluding China. IP in key markets such as Germany, France, Italy and
the UK, contracted during the first half and IP in the USA remained weak.
Together these markets accounted for approximately 50% of Group sales in
2024.
While the broader macroeconomic impact of evolving trade tariffs remains
uncertain, our local manufacturing presence in the USA helps mitigate our
direct exposure and we expect to continue to manage the financial impacts
through surcharges, pricing and limited reorganisation of manufacturing
activity.
Steam Thermal Solutions
Demand
As highlighted at the time of our full year results in March and our trading
update in May, demand for large projects remained weak across all markets, as
customers defer or reduce capital expenditure in response to uncertainty
around trade tariffs and lower macroeconomic growth. The impact was felt
most significantly in China, where our business is more weighted towards large
projects than in the rest of STS. Customers also temporarily deferred
capital investment decisions in Korea as a result of political instability at
the end of 2024 and during the first half of 2025. China and Korea accounted
for 22% of STS sales in 2024.
To counter this, our focus on leveraging our direct sales model in target
sectors through strong local customer relationships supported demand
generation in MRO and solution-sales across all markets.
In China, the double-digit growth in MRO demand delivered in the first half is
expected to continue into the second half of the year with the weakness in
large projects moderating. Following elections in Korea and the new
government's proposal of an economic stimulus package, we anticipate improving
demand in the second half, building on sequential growth in the second
quarter.
Sales
Sales of £414.2 million were in line with the first half of 2024 organically,
with strong growth in MRO and solution-sales offset by weakness in large
projects, particularly in China and Korea. Excluding large project sales in
China and Korea, STS organic sales growth was 3%.
We anticipate second half sales growth will be supported by a stronger than
usual order book at the end of the first half, reflecting customers' requests
for shipments into the second half, and further progress in implementing our
Commercial Excellence initiatives focused on driving self-generated demand.
Sales weakness in China (down 6% organically in the first half, having been
down 13% in 2024), is expected to moderate in the second half. Trading in
Korea is also expected to begin improving during the second half, building on
sequential growth in the second quarter.
Margin
Adjusted operating profit of £97.0 million was 3% higher organically and 4%
lower after an adverse exchange rate impact. Adjusted operating margin of
23.4% was 60bps higher organically and in line with our expectations. The
drop-through from the organic increase in sales to profit was supported by
savings in procurement and manufacturing overheads, net of investment in
future growth. We continued to maintain pricing discipline, mitigating cost
inflation, tariff impacts and protecting margin. We anticipate second half
adjusted operating margin to be similar to the first half.
Statutory results
Sales of £414.2 million were down 4% after an adverse exchange rate impact of
4%. Statutory operating profit of £66.2 million was down 33% driven by an
adverse exchange rate impact of 7% as well as restructuring costs of £27.9
million in the period. Statutory operating profit margin of 16.0% decreased
by 690bps.
Electric Thermal Solutions
Demand
Demand for ETS solutions remained robust during the first half with
double-digit growth in all three Divisions: Process Heating, Equipment Heating
and Heat Trace. In Process Heating we continue to see strong interest in
both Low Voltage (LV) and Medium Voltage (MV) electrification solutions with a
significant and growing pipeline of customer enquiries, including for large
projects. During the first half we won a large new contract to deliver
bespoke screw plug heating solutions from a supplier of temperature management
equipment to the datacentre sector. In Equipment Heating, demand from
Semicon customers continued to improve. Demand for our Heat Trace solutions
also benefited from datacentre opportunities and our cross-regional
go-to-market strategy, which is enabling us to open up new customer
relationships.
Sales
Sales of £212.3 million were 10% higher organically. Growth was driven by
operational improvements in Process Heating that increased shipments from the
large order book carried into 2025 and from a large new contract win. In
Equipment Heating, growth was supported by a recovery in demand from the
Semicon sector, which accounted for 11% of sales in 2024.
We expect the continuing robust demand environment across all Divisions and
delivery against our strong order books to support sales growth during the
second half, despite the stronger comparator.
Margin
Adjusted operating profit of £31.8million was 12% higher organically.
Operating leverage from sales growth, offset by further shipments of legacy
orders that have not been repriced for inflation, and pre-commissioning costs
for the new MV facility in Ogden, delivered a 60bps improvement in ETS margin
to 15.3%, before a one-off 30bps exchange rate impact on balance sheet items
arising from the sharp weakening of the US dollar following US tariff
announcements.
Margins improved progressively through the first half and we expect the second
half will continue to benefit from operating leverage and the higher
drop-through from Semicon sales, partially offset by shipments of residual
legacy orders and the ramp-up costs of our new MV facility in Ogden.
Statutory results
Sales of £212.3 million were up 7% after an adverse exchange rate impact of
2%. Statutory operating profit of £17.8 million was down 11% compared to
2024 reflecting the adverse exchange rate impact of 3% as well as one-off
restructuring costs of £1.3 million in the period. Statutory operating
profit margin of 8.4% was 180bps lower than in 2024.
Watson-Marlow Fluid Technology Solutions
Demand
We continued to see strong recovery in Biopharm order intake in the first
half, following double-digit growth in 2024, driven by end-users and now also
OEM customers. Growth in orders at over 10% was materially above sales growth.
For the first time since 2021 (peak COVID demand) orders now exceed sales.
In Process Industries, our targeted sector focus combined with our direct
sales capability enabled us to generate well above IP demand growth from the
Water & Wastewater, Food & Beverage and Mining sectors. We also saw
strong growth in demand from Medical Devices OEM customers, with several large
contracts specified for second half delivery, contributing to the strong order
book at the end of the first half.
Sales
Sales of £195.7 million were 2% higher organically supported by strong growth
in Process Industries, with Biopharm sales broadly level with 2024, not yet
benefiting from the strong growth in order intake.
We expect stronger second half sales growth compared to the first half,
benefiting from the continuing strength of Biopharm demand and expanded order
books in both Biopharm and Process Industries.
Margin
Adjusted operating profit of £50.6 million was 12% higher organically.
Adjusted operating profit margin of 25.9% was 240bps higher organically
supported by ongoing manufacturing efficiencies. We anticipate second half
adjusted operating profit margin will be in line with the first half, with
further benefits from manufacturing efficiencies and the drop-through from
higher sales enabling us to step up investments in future growth.
Statutory results
Sales of £195.7 million were down 1% on 2024 after an adverse exchange rate
impact of 3%. Statutory operating profit of £43.6 million was down 8%
compared to 2024 reflecting the adverse exchange rate impact of 7% as well as
one-off restructuring costs of £5.2 million in the period. Statutory
operating profit margin of 22.3% was down 150bps.
GROUP CHIEF FINANCIAL OFFICER'S REVIEW
Financial Performance
£m H1 2024 Exchange Organic H1 2025 Organic Reported
Revenue 827.0 (28.1) 23.3 822.2 3% (1)%
Adjusted operating profit 160.3 (11.4) 9.9 158.8 7% (1)%
Adjusted operating profit margin 19.4% 19.3% 70bps (10)bps
Adjusted basic EPS (pence) 137.2 137.6 -%
Statutory operating profit 147.2 106.8 (27)%
Statutory operating profit margin 17.8% 13.0% (480)bps
Basic EPS (pence) 123.8 85.0 (31)%
Group sales were 1% lower compared to 2024, including an adverse currency
impact. On an organic basis sales were 3% higher, driven by growth in ETS of
10% and WMFTS of 2%, with STS sales flat year on year.
Group adjusted operating profit was 1% lower compared to 2024, including a
currency headwind of 7%. On an organic basis, Group adjusted operating profit
was 7% higher, as all three Businesses delivered growth, with STS growing by
3%, ETS by 12% and WMFTS by 12%.
Group adjusted operating profit margin of 19.3% was 70bps higher organically
compared to 2024, benefiting from the drop-through of organic sales growth and
operating efficiencies, partially offset by increases in digital investments
within Corporate expenses. STS margin was 60bps higher on an organic basis
compared to 2024, with ETS margin 30bps higher and WMFTS margin 240bps higher.
Group statutory operating profit was 27% lower than in 2024 at £106.8
million, with statutory operating profit margin 480bps lower at 13.0%. The
reconciling items between adjusted operating profit of £158.8 million and
statutory operating profit of £106.8 million are shown below:
● a charge of £17.4 million (H1 2024: £17.3 million) for the amortisation of
acquisition-related intangible assets
● a restructuring charge of £34.6 million to simplify our organisation and
optimise certain elements of our manufacturing footprint. £2.1 million of
this charge related to the impairment of non-current assets as a result of the
restructuring
Tax and Interest
Net finance expense was lower than in 2024 at £18.6 million (H1 2024: £21.9
million) as a result of lower average net debt and lower rates on floating
debt. Full year finance expense is expected to be approximately £40
million.
The Group effective tax rate reflects the blended average of rates in tax
jurisdictions around the world in which the Group operates. The Group adjusted
effective tax rate increased by 90bps to 27.4% (H1 2024: 26.5%), due to
non-recurring investment incentives in the USA in 2024 and the reduced benefit
of the inflation adjustment in Argentina. The Group adjusted effective tax
rate is in line with our full year forecast for 2025 of 27%. On a statutory
basis the Group effective tax rate was 28.7% (H1 2024: 26.7%).
Earnings per share and dividends
Adjusted earnings per share were broadly in line with 2024 at 137.6 pence,
consistent with the small decrease in adjusted operating profit, lower net
financing costs and the increase in the effective tax rate. Statutory basic
earnings per share were 31% lower at 85.0 pence (H1 2024: 123.8 pence).
Statutory fully diluted earnings per share were not materially different to
statutory basic earnings per share in either year.
The Board has declared an Interim dividend of 48.9 pence (H1 2024: 47.5 pence)
per ordinary share, an increase of 3%, supporting the delivery of consistent
shareholder value. The dividend will be paid on 14 November 2025 to
shareholders on the register at the close of business on 17 October 2025.
Currency movements
Currency movements on translation negatively impacted Group sales by 3%. The
currency impact on adjusted operating profit was, as expected, adverse by 7%
due to translational and transactional impacts of £7.4 million and £4.0
million respectively. The translation downside reflects the impact of the
strengthening of sterling in the first half against the currencies in which
the Group operates. The main transactional exposure flow affecting the Group
is the export of products from our factories in the UK, invoiced in sterling,
less the import of goods from overseas Group factories and third parties which
are priced predominately in euros and US dollars. The net exposure to
transactional currency movements is approximately £150 million.
The currency headwinds we set out in our trading update in May are expected to
persist through the remainder of the year, which would impact 2024 sales by
approximately 3% to £1,615million and adjusted operating profit by
approximately 6% to £314 million, leading to an adjusted operating profit
margin of 19.4%. Movements in exchange rates are often volatile and
unpredictable therefore the actual impact may be different.
Adjusted Cash flow
Six months to 30 June 2025 2024
Adjusted Cash flow £m £m
Adjusted operating profit 158.8 160.3
Depreciation and amortisation (excl. leased assets) 22.1 20.2
Depreciation of leased assets 9.1 9.0
Additional contributions to pension schemes (3.6) (3.8)
Equity settled share plans 2.3 4.5
Working capital changes (48.6) (56.2)
Repayments of principal under lease liabilities (8.8) (8.7)
Capital expenditure (including software and development) (34.3) (39.7)
Adjusted cash from operations 97.0 85.6
Net interest (17.8) (21.0)
Income taxes paid (29.7) (37.9)
Adjusted Free cash flow 49.5 26.7
Net dividends paid (86.8) (84.2)
(Acquisitions)/Disposals of subsidiaries/associates (10.1) 2.9
Restructuring costs (12.9) (2.5)
Cash flow for the year (60.3) (57.1)
Exchange movements (1.5) 5.5
Opening net debt (596.2) (666.7)
Net debt at 30 June (658.0) (718.3)
Lease liability (89.8) (96.0)
Net debt and lease liability at 30 June (747.8) (814.3)
Adjusted cash from operations of £97.0 million (H1 2024: £85.6 million) was
£11.4 million higher, with an improved adjusted cash conversion of 61% (H1
2024: 53%). The improvement in cash conversion was driven by lower net capital
expenditure, together with improved working capital management, which offset
lower adjusted operating profit. Improved working capital management led to
a reduction in the half year working capital outflow, with the ratio of
working capital to sales decreasing by 190bps to 24.5% (H1 2024: 26.4%).
Net capital expenditure in the first half of the year of £34.3 million was
14% lower than in the comparative period (H1 2024: £39.7 million) and 4% of
sales. We are investing for long-term growth while maximising the utilisation
of our manufacturing capacity by driving productivity and efficiency
improvements. We expect net capital expenditure for the full year to be 4%
to 5% of sales.
Adjusted free cash flow of £49.5 million (H1 2024: £26.7 million) increased
by 85% driven by improved adjusted cash from operations as well as a reduction
of taxes paid in the period. Taxes paid decreased by 22% due to lower
operating profit and a non-recurring tax refund from HMRC due to the annulment
of the EC's decision relating to the UK's Controlled Foreign Company regime.
Total cash flow for the period includes a £12.9 million cost related to the
Group's restructuring (H1 2024: £2.5 million).
Financing and Liquidity
Net debt (excluding leases) at 30 June 2025 was £658.0 million (30 June 2024:
£718.3 million; 31 December 2024: £596.2 million), with a net debt to EBITDA
ratio of 1.8x (H1 2024: 1.9x; 31 December 2024: 1.6x).
As at 30 June 2025, total committed and undrawn debt facilities amounted to
£380.0 million, in addition to a net cash balance of £171.9 million. The
average tenor of our debt is over four years with the next contractual
repayment maturity in May 2026.
PRINCIPAL RISKS AND UNCERTAINTIES
The Group believes the Principal Risks and Uncertainties facing the Group for
the remainder of the year as reported in, and unchanged from, the Annual
Report 2024. The Group's Principal Risks and uncertainties at 31 December 2024
were detailed on pages 83 to 87 of the Annual Report 2024 and related to the
following areas: economic and political instability; significant exchange rate
movement; ageing enterprise systems; cybersecurity; loss of manufacturing
output at any Group factory; failure to realise acquisition objectives;
inability to identify and respond to changes in customer needs:
digital/non-digital; and breach of legal and regulatory requirements
(including Anti Bribery and Corruption laws).
INDEPENDENT REVIEW REPORT TO SPIRAX GROUP PLC
Conclusion
We have been engaged by the Company to review the condensed set of Financial
Statements in the half-yearly financial report for the six months ended 30
June 2025 which comprises the Condensed Consolidated Statement of Financial
Position, the Condensed Consolidated Income Statement, the Condensed
Consolidated Statement of Comprehensive Income, the Condensed Consolidated
Statement of Changes in Equity, the Condensed Consolidated Statement of Cash
Flows and related Notes 1 to 12.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2025 is not prepared, in all
material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in Note 1 the annual financial statements of the group will be
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
this ISRE (UK) 2410, however future events or conditions may cause the entity
to cease to continue as a going concern.
Responsibilities of the Directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statement in the half-yearly financial report. Our conclusion, including our
conclusions relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
11 August 2025
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 30 June 31 December
2025 2024 2024
£m £m £m
Notes (unaudited) (unaudited) (audited)
ASSETS
Non-current assets
Property, plant and equipment 425.4 422.5 433.1
Right-of-use assets 90.2 97.4 95.6
Goodwill 652.3 674.6 669.7
Other intangible assets 398.9 436.5 420.4
Prepayments 2.0 1.1 1.8
Investment in Associate 3.2 3.9 3.3
Taxation recoverable - 4.9 -
Deferred tax assets 38.4 27.1 34.2
1,610.4 1,668.0 1,658.1
Current assets
Inventories 251.0 290.4 253.2
Trade receivables 317.0 322.3 313.8
Other current assets 88.7 70.2 75.1
Taxation recoverable 14.3 9.2 10.6
Cash and cash equivalents 8 303.2 330.1 334.2
974.2 1,022.2 986.9
Total assets 2,584.6 2,690.2 2,645.0
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables 232.5 234.4 263.0
Provisions 13.2 6.0 5.4
Bank overdrafts 8 131.3 167.8 100.3
Current portion of long-term borrowings 8 125.5 3.8 123.9
Short-term lease liabilities 8 15.8 15.9 17.2
Current tax payable 31.7 25.5 23.3
550.0 453.4 533.1
Net current assets 424.2 568.8 453.8
Non-current liabilities
Long-term borrowings 8 704.4 876.8 706.2
Long-term lease liabilities 8 74.0 80.1 77.9
Deferred tax liabilities 61.6 64.4 63.6
Post-retirement benefits 7 38.4 39.2 42.5
Provisions 13.9 6.9 6.3
Long-term payables 6.0 11.2 6.2
898.3 1,078.6 902.7
Total liabilities 1,448.3 1,532.0 1,435.8
Net assets 2 1,136.3 1,158.2 1,209.2
Equity
Share capital 19.9 19.8 19.8
Share premium account 92.0 90.4 92.0
Translation reserve (143.3) (76.5) (86.1)
Other reserves 1.2 (11.3) (7.5)
Retained earnings 1,166.2 1,135.3 1,190.6
Equity shareholders' funds 1,136.0 1,157.7 1,208.8
Non-controlling interest 0.3 0.5 0.4
Total equity 1,136.3 1,158.2 1,209.2
Total equity and liabilities 2,584.6 2,690.2 2,645.0
CONDENSED CONSOLIDATED INCOME STATEMENT
Six months Six months Year ended
to 30 June to 30 June 31 December
2025 2024 2024
£m £m £m
Notes (unaudited) (unaudited) (audited)
Revenue 2 822.2 827.0 1,665.2
Operating costs (715.4) (679.8) (1,360.6)
Operating profit 2 106.8 147.2 304.6
Financial expenses (23.6) (28.4) (56.7)
Financial income 5.0 6.5 13.0
Net financing expense 3 (18.6) (21.9) (43.7)
Share of loss of Associate (0.3) (0.5) (2.0)
Profit before taxation 87.9 124.8 258.9
Taxation 4 (25.2) (33.5) (67.5)
Profit for the period 62.7 91.3 191.4
Attributable to:
Equity shareholders 62.7 91.2 191.2
Non-controlling interest - 0.1 0.2
Profit for the period 62.7 91.3 191.4
Earnings per share
Basic earnings per share 5 85.0p 123.8p 259.6p
Diluted earnings per share 5 84.8p 123.6p 258.9p
Dividends
Dividends per share 6 48.9p 47.5p 165.0p
Dividends paid (per share) 6 117.5p 114.0p 161.5p
All amounts relate to continuing operations. The Notes on pages 21 to 29
form an integral part of the Interim Condensed Consolidated Financial
Statements. Adjusted performance measures are included in the Appendix.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months Six months Year ended
to 30 June to 30 June 31 December
2025 2024 2024
£m £m £m
(unaudited) (unaudited) (audited)
Profit for the period 62.7 91.3 191.4
Items that will not be reclassified to profit or loss:
Remeasurement gain on post-retirement benefits 1.8 9.6 3.6
Deferred tax on remeasurement gain on post-retirement benefits (0.9) (2.3) (1.1)
0.9 7.3 2.5
Items that may be reclassified subsequently to profit or loss:
Exchange loss on translation of foreign operations and net investment hedges (57.2) (16.1) (25.7)
Gain/(loss) on cash flow hedges net of tax 5.0 (0.8) (2.3)
(52.2) (16.9) (28.0)
Total comprehensive income for the period 11.4 81.7 165.9
Attributable to:
Equity shareholders 11.4 81.6 165.7
Non-controlling interest - 0.1 0.2
Total comprehensive income for the period 11.4 81.7 165.9
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 30 June 2025
(unaudited) Share premium Equity shareholders' funds Non-controlling interest
Share capital account Translation Other reserves Retained earnings £m £m Total equity
£m £m Reserve £m £m £m
£m
Balance at 1 January 2025 19.8 92.0 (86.1) (7.5) 1,190.6 1,208.8 0.4 1,209.2
Profit for the period - - - - 62.7 62.7 - 62.7
Other comprehensive (expense)/income:
Foreign exchange translation differences and net investment hedges - - (57.2) - - (57.2) - (57.2)
Remeasurement gain on post-retirement benefits - - - - 1.8 1.8 - 1.8
Deferred tax on remeasurement gain on post-retirement benefits - - - - (0.9) (0.9) - (0.9)
Cash flow hedges - - - 5.0 - 5.0 - 5.0
Total other comprehensive (expense)/income for the period - - (57.2) 5.0 0.9 (51.3) - (51.3)
Total comprehensive (expense)/income for the period - - (57.2) 5.0 63.6 11.4 - 11.4
Contributions by and distributions to owners of the Company:
Dividends paid - - - - (86.7) (86.7) (0.1) (86.8)
Equity-settled share plans net of tax - - - - (1.3) (1.3) - (1.3)
Issue of share capital 0.1 - - - - 0.1 - 0.1
Employee Benefit Trust shares - - - 3.7 - 3.7 - 3.7
Balance at 30 June 2025 19.9 92.0 (143.3) 1.2 1,166.2 1,136.0 0.3 1,136.3
Other reserves represent the Group's cash flow hedge, capital redemption and
employee benefit trust reserves. The non-controlling interest is a 1.5% (30
June 2024: 1.7%; 31 December 2024: 1.6%) share of Spirax Sarco (Korea) Ltd
held by employee shareholders.
For the period ended 30 June 2024 Non-controlling interest
(unaudited) Share premium Equity shareholders' funds £m
Share capital account Translation Other reserves Retained earnings £m Total equity
£m £m Reserve £m £m £m
£m
Balance at 1 January 2024 19.8 90.1 (60.4) (12.9) 1,120.3 1,156.9 0.8 1,157.7
Profit for the period - - - - 91.2 91.2 0.1 91.3
Other comprehensive income/(expense):
Foreign exchange translation differences and net investment hedges - - (16.1) - - (16.1) - (16.1)
Remeasurement gain on post-retirement benefits - - - - 9.6 9.6 - 9.6
Deferred tax on remeasurement gain on post-retirement benefits - - - - (2.3) (2.3) - (2.3)
Cash flow hedges - - - (0.8) - (0.8) - (0.8)
Total other comprehensive (expense)/income for the period - - (16.1) (0.8) 7.3 (9.6) - (9.6)
Total comprehensive income/(expense) for the period - - (16.1) (0.8) 98.5 81.6 0.1 81.7
Contributions by and distributions to owners of the Company:
Dividends paid - - - - (84.0) (84.0) (0.2) (84.2)
Equity-settled share plans net of tax - - - - 1.0 1.0 - 1.0
Purchase of shares from non-controlling interest - - - - (0.5) (0.5) (0.2) (0.7)
Issue of share capital - 0.3 - - - 0.3 - 0.3
Employee Benefit Trust shares - - - 2.4 - 2.4 - 2.4
Balance at 30 June 2024 19.8 90.4 (76.5) (11.3) 1,135.3 1,157.7 0.5 1,158.2
For the year ended 31 December 2024 Non-controlling interest
(audited) Share premium Equity shareholders' funds £m
Share capital account Translation Other reserves Retained earnings £m Total equity
£m £m Reserve £m £m £m
£m
Balance at 1 January 2024 19.8 90.1 (60.4) (12.9) 1,120.3 1,156.9 0.8 1,157.7
Profit for the period - - - - 191.2 191.2 0.2 191.4
Other comprehensive income/(expense):
Foreign exchange translation and net investment hedges loss - - (25.7) - - (25.7) - (25.7)
Remeasurement gain on post-retirement benefits - - - - 3.6 3.6 - 3.6
Deferred tax on remeasurement gain on post-retirement benefits - - - - (1.1) (1.1) - (1.1)
Loss on cash flow hedges net of tax - - - (2.3) - (2.3) - (2.3)
Total other comprehensive (expense)/income for the year - - (25.7) (2.3) 2.5 (25.5) - (25.5)
Total comprehensive income/(expense) for the year - - (25.7) (2.3) 193.7 165.7 0.2 165.9
Contributions by and distributions to owners of the Company:
Dividends paid - - - - (119.0) (119.0) (0.3) (119.3)
Equity-settled share plans net of tax - - - - (3.9) (3.9) - (3.9)
Purchase of shares from NCI - - - - (0.5) (0.5) (0.3) (0.8)
Issue of share capital - 1.9 - - - 1.9 - 1.9
Employee Benefit Trust shares - - - 7.7 - 7.7 - 7.7
Balance at 31 December 2024 19.8 92.0 (86.1) (7.5) 1,190.6 1,208.8 0.4 1,209.2
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six months Six months Year ended
to 30 June to 30 June 31 December
2025 2024 2024
£m £m £m
Notes (unaudited) (unaudited) (audited)
Cash flows from operating activities
Profit before taxation 87.9 124.8 258.9
Depreciation, amortisation and impairment 51.6 49.4 103.7
Profit on disposal of fixed assets (0.9) (2.9) (3.8)
Share of loss of Associate 0.3 - 2.0
Cash payments to the pension schemes greater than the charge to operating (3.6) (3.8) (6.4)
profit
Profit on disposal of Associates - - (3.2)
Acquisition related items - (4.2) (7.3)
Restructuring related provisions and impairments 19.6 (2.5) (2.4)
Equity-settled share plans 2.3 4.5 3.1
Net finance expense 18.6 21.9 43.7
Operating cash flow before changes in working capital and provisions 175.8 187.2 388.3
(Increase)/decrease in trade and other receivables (22.1) (30.3) (34.5)
(Increase)/decrease in inventories (6.8) (11.3) 21.9
(Decrease)/increase in provisions (0.7) (1.5) (2.5)
(Decrease)/increase in trade and other payables (19.0) (13.1) 16.1
Cash generated from operations 127.2 131.0 389.3
Income taxes paid (29.7) (37.9) (76.5)
Net cash from operating activities 97.5 93.1 312.8
Cash flows from investing activities
Purchase of property, plant and equipment (27.8) (33.2) (74.3)
Proceeds from sale of property, plant and equipment 1.3 4.4 9.2
Purchase of software and other intangibles (6.3) (8.6) (14.6)
Development expenditure capitalised (1.5) (2.3) (3.9)
Disposal of subsidiaries - - 5.6
Acquisition of businesses net of cash acquired (10.1) 2.9 (4.5)
Acquisition of businesses reimbursed consideration - - 4.2
Interest received 5.0 6.5 13.0
Net cash used in investing activities (39.4) (30.3) (65.3)
Cash flows from financing activities
Proceeds from issue of share capital - 0.3 1.9
Repaid borrowings (19.2) (42.7) (103.0)
New borrowings 20.8 55.2 76.8
Interest paid including interest on lease liabilities (22.8) (27.5) (54.8)
Repayment of lease liabilities 8 (8.8) (8.7) (16.6)
Dividends paid (including minority shareholders) 6 (86.8) (84.2) (119.3)
Net cash used in financing activities (116.8) (107.6) (215.0)
Net change in cash and cash equivalents 8 (58.7) (44.8) 32.5
Net cash and cash equivalents at beginning of period 8 233.9 212.8 212.8
Exchange movement 8 (3.3) (5.7) (11.4)
Net cash and cash equivalents at end of period 8 171.9 162.3 233.9
Borrowings 8 (829.9) (880.6) (830.1)
Net debt at end of period 8 (658.0) (718.3) (596.2)
Lease liabilities 8 (89.8) (96.0) (95.1)
Net debt and lease liabilities at end of period 8 (747.8) (814.3) (691.3)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
Spirax Group plc is a Company domiciled in the UK. The Condensed
Consolidated Interim Financial Statements of Spirax Group plc and its
subsidiaries (the Group) for the six months ended 30 June 2025 have been
prepared in accordance with United Kingdom adopted International Financial
Reporting Standard IAS 34 (Interim Financial Reporting). The accounting
policies applied are consistent with those set out in the Spirax Group plc
2024 Annual Report.
These Condensed Consolidated Interim Financial Statements do not include all
the information required for full annual statements and should be read in
conjunction with the 2024 Annual Report. The comparative figures for the
year ended 31 December 2024 do not constitute the Group's statutory Financial
Statements for that financial year as defined in Section 434 of the Companies
Act 2006. The Financial Statements of the Group for the year ended 31
December 2024 were prepared in accordance with International Financial
Reporting Standards (IFRS), as adopted by the United Kingdom. The statutory
Consolidated Financial Statements for Spirax Group plc in respect of the year
ended 31 December 2024 have been reported on by the Company's auditor and
delivered to the registrar of companies. The report of the auditor was (i)
unqualified, (ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their report, and
(iii) did not contain a statement under Section 498 (2) or (3) of the
Companies Act 2006.
The Consolidated Financial Statements of the Group in respect of the year
ended 31 December 2024 are available upon request from the General Counsel and
Company Secretary, Charlton House, Cheltenham, GL53 8ER. The Report is also
available on our website at www.spiraxgroup.com (http://www.spiraxgroup.com) .
The Condensed Consolidated Interim Financial Statements for the six months
ended 30 June 2025, which have been reviewed by the auditor in accordance with
International Standard on Review Engagements (UK and Ireland) 2410 'Review of
Interim Financial Information Performed by the Independent Auditor of the
Entity' issued by the Financial Reporting Council, were authorised by the
Board on 11 August 2025.
The Half Year Report and Interim Financial Statements (Half Year Report) has
been prepared solely to provide additional information to shareholders as a
body to assess the Group's strategies and the potential for those strategies
to succeed. This Half Year Report should not be relied upon by any other
party or for any other purpose.
GOING CONCERN
When managing liquidity, the Group's principal objective is to safeguard the
ability to continue as a going concern for at least 12 months from the date of
signing the 2025 Half Year results. The Group retains sufficient resources
to remain in compliance with all the required terms and conditions within its
borrowing facilities with material headroom. No material uncertainties have
been identified.
The Group continues to conduct ongoing risk assessments with its business
operations and on its liquidity. Consideration has also been given to
'reverse stress tests', which seek to identify factors that might cause the
Group to require additional liquidity and form a view as to the probability of
these occurring.
The Group's financial position remains robust, with the next maturity of our
committed debt facilities being €120m US Private Placement which matures in
May 2026 and is reflected in the cash flow forecast model. The Group's debt
facilities contain a leverage (Net Debt/EBITDA) covenant of up to 3.5x.
Certain debt facilities also contain an interest cover (EBITDA/Net Finance
Expense) covenant of a minimum of 3.0x. The Group regularly monitors its
financial position to ensure that it remains within the terms of these debt
covenants. Leverage (defined as net debt divided by adjusted earnings before
interest, tax, depreciation and amortisation) was 1.8x at 30 June 2025 (30
June 2024: 1.9x; 31 December 2024: 1.6x), Interest cover (defined as adjusted
earnings before interest, tax, depreciation and amortisation divided by net
bank interest) was 11x at 30 June 2025 (30 June 2024: 9x; 31 December 2024:
10x).
Reverse stress testing was also performed to assess the level of business
under-performance that would be required for a breach of the financial
covenants to occur. The results of which evidenced that no reasonably
possible change in future forecast cash flows would cause a breach of these
covenants. The reverse stress test cash flow modelling does not consider any
mitigating actions that the Group would implement in the event of
a severe and extended revenue and profitability decline. Such actions would
serve to further increase covenant headroom.
This assessment indicates that the Group can operate within the level of its
current committed debt facilities, without the need to obtain any new
facilities for a period of not less than 12 months from the date of this
report.
NEW STANDARDS AND INTERPRETATIONS APPLIED FOR THE FIRST TIME
The Group has applied the following amendments for the first time from 1
January 2025. Adoption has not had a material impact on the disclosures or on
the amounts reported in these Financial Statements:
● Lack of Exchangeability (Amendments to IAS 21)
The economy in both Argentina and Turkey remains subject to high inflation.
At 30 June 2025 we have concluded that applying IAS 29 (Financial Reporting
in Hyperinflationary Economies) is not required as the impact of adopting is
not material. We will continue to assess the position going forward.
NEW STANDARDS AND INTERPRETATIONS NOT YET APPLIED
At the date of approval of these Condensed Consolidated Financial Statements,
there were no new or revised IFRSs, amendments or interpretations in issue but
not yet effective that are potentially material for the Group and which have
not yet been applied.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of Interim Financial Statements, in conformity with adopted
IFRS, requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amount of
assets and liabilities, income and expense. Actual results may differ from
these estimates. In preparing these Condensed Consolidated Interim Financial
Statements, the significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation uncertainty were
the same as those that applied to the Consolidated Financial Statements for
the year ended 31 December 2024.
RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge:
· This Condensed Consolidated set of Interim Financial Statements has been
prepared in accordance with IAS 34 (Interim Financial Reporting), as adopted
by the United Kingdom;
· The interim management report includes a fair review of the information
required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of
important events that have occurred during the first six months of the
financial year and their impact on the Condensed Consolidated Financial
Statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year.
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year that have materially affected the financial position or
performance of the entity during that period, and any changes in the related
party transactions described in the last Annual Report that could do so.
The Directors of Spirax Group plc on 11 August 2025 are as listed in the 2024
Annual Report on pages 102 and 103 with the addition of Maria Antoniou who
joined the Board as a Non-Executive Director on 1 June 2025.
N. B. Patel
Group Chief Executive Officer
11 August 2025
On behalf of the Board
2. SEGMENTAL REPORTING
As required by IFRS 8 Operating Segments, the segmental structure reflects the
current internal reporting provided to the Chief Operating Decision Maker
(considered to be the Board) on a regular basis to assist in making decisions
on resource allocation to each segment and to assess performance.
The Group is organised into three segments with the following core product
expertise:
● Steam Thermal Solutions - Industrial and commercial steam systems
● Electric Thermal Solutions - Electrical process heating and temperature
management solutions
● Watson-Marlow Fluid Technology Solutions - Peristaltic and niche pumps and
associated fluid path technologies
No changes to the structure of operating segments have been made during the
current period.
Analysis by operating segment
Total
Six months to 30 June 2025 operating Operating
Revenue profit/(loss) profit margin
£m £m %
Steam Thermal Solutions 414.2 66.2 16.0%
Electric Thermal Solutions 212.3 17.8 8.4%
Watson-Marlow Fluid Technology Solutions 195.7 43.6 22.3%
Corporate - (20.8)
Total 822.2 106.8 13.0%
Net finance expense (18.6)
Share of loss of Associate (0.3)
Profit before taxation 87.9
Total
Six months to 30 June 2024 operating Operating
Revenue profit/(loss) profit margin
£m £m %
Steam Thermal Solutions 430.8 98.6 22.9%
Electric Thermal Solutions 197.7 20.1 10.2%
Watson-Marlow Fluid Technology Solutions 198.5 47.3 23.8%
Corporate - (18.8)
Total 827.0 147.2 17.8%
Net finance expense (21.9)
Share of loss of Associate (0.5)
Profit before taxation 124.8
Year ended 31 December 2024 Total
operating Operating
Revenue profit/(loss) profit margin
£m £m %
Steam Thermal Solutions 867.9 198.9 22.9%
Electric Thermal Solutions 404.6 46.1 11.4%
Watson-Marlow Fluid Technology Solutions 392.7 90.3 23.0%
Corporate - (30.7)
Total 1,665.2 304.6 18.3%
Net finance expense (43.7)
Share of loss of Associate (2.0)
Profit before taxation 258.9
The following table details the split of revenue by geography for the combined
Group:
Six months Six months Year ended
to 30 June 2025 to 30 June 2024 31 December 2024
£m £m £m
Europe, Middle East and Africa 365.6 366.2 721.3
Asia Pacific 150.8 166.1 338.2
Americas 305.8 294.7 605.7
Total revenue 822.2 827.0 1,665.2
Net financing income and expense
Six months Six months Year ended
to 30 June 2025 to 30 June 2024 31 December 2024
£m £m £m
Steam Thermal Solutions (0.6) (0.1) (0.4)
Electric Thermal Solutions 0.3 (0.4) (0.3)
Watson-Marlow Fluid Technology Solutions (0.3) (0.1) -
Corporate (18.0) (21.3) (43.0)
Total net financing expense (18.6) (21.9) (43.7)
Net assets
30 June 2025 30 June 2024 31 December 2024
Assets Liabilities Assets Liabilities Assets Liabilities
£m £m £m £m £m £m
Steam Thermal Solutions 700.3 (185.0) 711.3 (168.8) 693.9 (190.8)
Electric Thermal Solutions 1,097.2 (69.4) 1,149.0 (89.4) 1,139.9 (84.4)
Watson-Marlow Fluid Technology Solutions 395.6 (43.9) 424.6 (38.1) 403.9 (38.8)
Corporate 35.7 (5.8) 33.9 (1.3) 28.3 (9.4)
2,228.8 (304.1) 2,318.8 (297.6) 2,266.0 (323.4)
Liabilities (304.1) (297.6) (323.4)
Net deferred tax (23.2) (37.3) (29.4)
Net tax payable (17.4) (11.4) (12.7)
Net debt including lease liabilities (747.8) (814.3) (691.3)
Net assets 1,136.3 1,158.2 1,209.2
Capital additions, depreciation, amortisation and impairment
Six months to Six months to Year ended
30 June 2025 30 June 2024 31 December 2024
Depreciation, amortisation and impairment Depreciation, amortisation and impairment Depreciation, amortisation and impairment £m
£m £m
Capital Capital Capital
additions additions additions
£m £m £m
Steam Thermal Solutions 25.8 19.0 19.0 16.9 37.7 33.0
Electric Thermal Solutions 11.8 19.5 21.1 18.8 48.4 37.7
Watson-Marlow Fluid Technology Solutions 4.7 12.3 8.7 12.3 18.9 31.0
Corporate 2.9 0.8 4.3 1.4 4.6 2.0
Total 45.2 51.6 53.1 49.4 109.6 103.7
Capital additions include property, plant and equipment at 30 June 2025 of
£27.8 million (30 June 2024: £33.2 million; 31 December 2024: £74.3
million). Capital additions also include other intangible assets at 30 June
2025 of £10.8 million (30 June 2024: £10.9 million; 31 December 2024: £18.5
million), of which £3.0 million relates to acquisition related intangibles
(30 June 2024: £nil million; 31 December 2024: £nil million). Right-of-use
asset additions at 30 June 2025 were £6.6 million (30 June 2024: £9.0
million; 31 December 2024: £16.8 million).
3. NET FINANCING INCOME AND EXPENSE
Six months Six months Year ended
to 30 June to 30 June 31 December
2025 2024 2024
£m £m £m
Financial expenses:
Bank and other borrowing interest payable (21.2) (25.9) (51.7)
Interest expense on lease liabilities (1.6) (1.6) (3.1)
Net interest on pension scheme liabilities (0.8) (0.9) (1.9)
(23.6) (28.4) (56.7)
Financial income:
Bank interest receivable 5.0 6.5 13.0
Net financing expense (18.6) (21.9) (43.7)
Net bank interest (16.2) (19.4) (38.7)
Interest expense on lease liabilities (1.6) (1.6) (3.1)
Net pension scheme financial expense (0.8) (0.9) (1.9)
Net financing expense (18.6) (21.9) (43.7)
4. TAXATION
Taxation has been estimated at the rate expected to be incurred in the full
year.
Six months Six months Year ended
to 30 June to 30 June 31 December
2025 2024 2024
£m £m £m
UK corporation tax 3.9 (1.9) 7.4
Foreign tax 31.2 35.6 67.4
Deferred tax (9.9) (0.2) (7.3)
Total taxation 25.2 33.5 67.5
Effective tax rate 28.7% 26.7% 26.1%
The Group's tax charge in future years is likely to be affected by the
proportion of profits arising and the effective tax rates in the various
countries in which the Group operates. The rate may also be affected by the
impact of any acquisitions.
The Group is subject to a tax adjustment in Argentina that seeks to offset the
impact of inflation upon taxable profits. This adjustment gave a reduction
in the Group's effective tax rate in the period of 75bps on a statutory basis
(30 June 2024: 60bps; 31 December 2024: 110 bps). Whilst we include the
expected impact of this adjustment in our guidance for the effective tax rate,
this is difficult to accurately forecast due to the current levels of
inflation in Argentina. Further, in 2024 the Group benefited from
non-recurring investment tax incentives in the USA, with no such benefits
forecast in 2025.
The Group monitors income tax developments in the territories in which it
operates. This includes changes to the USA corporate tax system and the
potential for 'retaliatory tax measures' to be implemented by the current
administration. Based on relevant draft legislation, these will not create a
significant additional tax cost for the Group.
On 4 March 2025, the Group received a refund from HM Revenue & Customs of
£4.9 million being the amount recognised as a receivable on its balance
sheet. The amount was originally paid in 2021 following the European
Commission's 2019 decision that certain aspects of the UK's Controlled Foreign
Company regime constituted State Aid, a decision subsequently annulled by the
European Court of Justice on 19 September 2024.
5. EARNINGS PER SHARE
Six months Six months Year ended
to 30 June to 30 June 31 December
2025 2024 2024
Profit attributable to equity shareholders (£m) 62.7 91.2 191.2
Weighted average shares in issue (million) 73.7 73.6 73.7
Dilution (million) 0.2 0.2 0.2
Diluted weighted average shares in issue (million) 73.9 73.8 73.9
Basic earnings per share 85.0p 123.8p 259.6p
Diluted earnings per share 84.8p 123.6p 258.9p
Basic and diluted earnings per share calculated on an adjusted profit basis
are included in the Appendix. The dilution is in respect of the Performance
Share Plan.
6. DIVIDENDS
Six months Six months Year ended
to 30 June to 30 June 31 December
2025 2024 2024
£m £m £m
Amounts paid in the period:
Final dividend for the year ended 31 December 2024 of 117.5p (2023: 114.0p) 86.7 84.0 84.0
per share
Interim dividend for the year ended 31 December 2024 of 47.5p (2023: 46.0p) - - 35.0
per share
Total dividends paid 86.7 84.0 119.0
Amounts arising in respect of the period:
Interim dividend for the year ending 31 December 2025 of 48.9p (2024: 47.5p) 36.0 35.0 35.0
per share
Final dividend for the year ended 31 December 2024 of 117.5p (2023: 114.0p) - - 86.6
per share
Total dividends arising 36.0 35.0 121.6
The Interim dividend for the year ending 31 December 2025 was approved by the
Board after 30 June 2025. It is therefore not included as a liability in
these Interim Condensed Consolidated Financial Statements. No scrip
alternative to the cash dividend is being offered in respect of the 2025
interim dividend.
In addition, dividends paid to minority shareholders at 30 June 2025 were
£0.1 million (30 June 2024: £0.2 million; 31 December 2024: £0.3 million).
7. POST-RETIREMENT BENEFITS
The Group is accounting for pension costs in accordance with IAS 19. The
disclosures shown here are in respect of the Group's Defined Benefit
Obligations. Other plans operated by the Group were either Defined
Contribution plans or were deemed immaterial for the purposes of IAS 19
reporting. The full IAS 19 disclosures for the year ended 31 December 2024
are included in the Group's Annual Report.
The amounts recognised in the Consolidated Statement of Financial Position are
as follows:
30 June 30 June 31 December
2025 2024 2024
£m £m £m
Post-retirement benefits (38.4) (39.2) (42.5)
Related deferred tax asset 9.6 10.1 11.0
Net pension liability (28.8) (29.1) (31.5)
8. ANALYSIS OF CHANGES IN NET DEBT, INCLUDING CHANGES IN LIABILITIES ARISING FROM
FINANCING ACTIVITIES
Exchange movement
1 January Cash flow Acquired debt* £m 30 June 2025
2025 £m £m £m
£m
Current portion of long-term borrowings (123.9) (125.5)
Non-current portion of long-term borrowings (706.2) (704.4)
Total borrowings (830.1) (829.9)
Lease liability (95.1) 8.8 (6.1) 2.6 (89.8)
Borrowings (830.1) (1.6) - 1.8 (829.9)
Changes in liabilities arising from financing (925.2) 7.2 (6.1) 4.4 (919.7)
Cash at bank 334.2 (27.0) - (4.0) 303.2
Bank overdrafts (100.3) (31.7) - 0.7 (131.3)
Net cash and cash equivalents 233.9 (58.7) - (3.3) 171.9
Net debt and lease liability (691.3) (51.5) (6.1) 1.1 (747.8)
Net debt excluding lease liability (596.2) (60.3) - (1.5) (658.0)
* Debt acquired includes both debt acquired due to acquisition, and debt
recognised on the balance sheet due to entry into new leases and disposals of
existing leases.
During the period £21.2 million of interest on external borrowings (30 June
2024: £25.9 million; 31 December 2024: £51.7 million) was incurred and paid.
At 30 June 2025 total lease liabilities consist of £15.8 million (30 June
2024: £15.9 million; 31 December 2024: £17.2 million) short-term and £74.0
million (30 June 2024: £80.1 million; 31 December 2024: £77.9 million)
long-term.
Exchange movement
1 January Cash flow Acquired debt* £m 30 June
2024 £m £m 2024
£m £m
Current portion of long-term borrowings (3.6) (3.8)
Non-current portion of long-term borrowings (875.9) (876.8)
Total borrowings (879.5) (880.6)
Lease liability (96.7) 8.7 (9.1) 1.1 (96.0)
Borrowings (879.5) (12.5) - 11.4 (880.6)
Changes in liabilities arising from financing (976.2) (3.8) (9.1) 12.5 (976.6)
Cash at bank 359.7 (21.9) - (7.7) 330.1
Bank overdrafts (146.9) (22.9) - 2.0 (167.8)
Net cash and cash equivalents 212.8 (44.8) - (5.7) 162.3
Net debt and lease liability (763.4) (48.6) (9.1) 6.8 (814.3)
Net debt excluding lease liability (666.7) (57.3) - 5.7 (718.3)
Exchange movement
£m 31 December 2024
1 January Cash flow Acquired debt* £m
2024 £m £m
£m
Current portion of long-term borrowings (3.6) (123.9)
Non-current portion of long-term borrowings (875.9) (706.2)
Total borrowings (879.5) (830.1)
Lease liability (96.7) 16.6 (16.5) 1.5 (95.1)
Borrowings (879.5) 26.2 - 23.2 (830.1)
Changes in liabilities arising from financing (976.2) 42.8 (16.5) 24.7 (925.2)
Cash at bank 359.7 (11.6) - (13.9) 334.2
Bank overdrafts (146.9) 44.1 - 2.5 (100.3)
Net cash and cash equivalents 212.8 32.5 - (11.4) 233.9
Net debt and lease liability (763.4) 75.3 (16.5) 13.3 (691.3)
Net debt excluding lease liability (666.7) 58.7 - 11.8 (596.2)
9. RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
Note. Full details of the Group's other related party relationships,
transactions and balances are given in the Group's Financial Statements for
the year ended 31 December 2024. There have been no material changes in
these relationships in the period up to the end of this Report.
No related party transactions have taken place in the first half of 2025 that
have materially affected the financial position or the performance of the
Group during that period.
10. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table details a comparison of the Group's financial assets and
liabilities where book values and fair values differ:
30 June 2025 30 June 2024 31 December 2024
Carrying Fair Carrying Fair Carrying Fair
value value value value value value
£m £m £m £m £m £m
Borrowings 829.9 830.0 880.6 872.3 830.1 822.8
Fair values of financial assets and financial liabilities
Fair values of financial assets and liabilities at 30 June 2025 are not
materially different from book values due to their size, the fact that they
were at short-term rates of interest or for borrowings at long-term rates of
interest where the rate of interest is not materially different to the current
market rate. For derivatives, the fair value of forward exchange contracts
are marked to market by discounting the future contracted cash flows using
readily available market data. For interest-bearing loans and borrowings,
fair value is calculated based on discounted expected future principal and
interest cash flows using a current market rate of interest. For lease
liabilities, the fair value is estimated as the present value of future cash
flows, discounted at the incremental borrowing rate for the related
geographical location, unless the rate implicit in the lease is readily
determinable. For receivables and payables with a remaining life of less
than one year, the notional amount is deemed to reflect the fair value.
The Group uses forward currency contracts to manage its exposure to movements
in foreign exchange rates. The forward contracts are designated as hedging
instruments in a cash flow hedging relationship. At 30 June 2025 the Group
had contracts outstanding to economically hedge or to purchase £37.6 million
with US dollars, £72.9 million with euros, £8.0 million with Korean won,
£16.5 million with Chinese renminbi, £4.1 million with Singapore dollars,
€20.6 million with US dollars, €2.7 million with Korean won, €9.3
million with Chinese renminbi and USD 23.3 million with Mexican Pesos. The
fair value at the end of the reporting period is a £5.4 million asset (30
June 2024: £0.8 million asset; 31 December 2024: £1.3 million liability).
Financial instruments fair value disclosure
Fair value measurements are classified into three levels, depending on the
degree to which the fair value is observable.
● Level 1 fair value measurements are those derived from quoted prices in active
markets for identical assets and liabilities
● Level 2 fair value measurements are those derived from other observable inputs
for the asset or liability
● Level 3 fair value measurements are those derived from valuation techniques
using inputs that are not based on observable market data
We consider that the derivative financial instruments fall into Level 2.
There have been no transfers between levels during the period.
11. CAPITAL COMMITMENTS
Capital expenditure contracted for, but not provided for, at 30 June 2025 was
£6.4 million (30 June 2024: £10.9 million; 31 December 2024: £13.7
million). All capital commitments related to property, plant and equipment
and leased assets.
12. EXCHANGE RATES
Set out below is an additional disclosure (not required by IAS 34) that
highlights movements in a selection of average exchange rates between half
year 2024 and half year 2025.
Average Average
half year half year Change
2025 2024 %
US dollar 1.30 1.26 (3)%
Euro 1.19 1.17 (2)%
Renminbi 9.41 9.11 (3)%
Won 1,857.89 1,708.29 (9)%
Real 7.50 6.47 (16)%
Argentine peso 1,446.38 1,087.16 (33)%
A negative movement indicates a strengthening in sterling versus that
currency. When sterling strengthens against other currencies in which the
Group operates, the Group incurs a loss on translation of the financial
results into sterling.
On a translation basis, sales decreased by 3% and adjusted operating profit
decreased by 5%, with transactional currency also impacting profit adversely
by another 2%, giving a total decrease to profit from currency movements of
7%.
Appendix - Alternative performance measures
The Group reports under International Financial Reporting Standards (IFRS) and
also uses adjusted performance measures where the Board believes that:
· they help to effectively monitor the performance of the Group; and
· users of the Financial Statements might find them informative.
Certain adjusted performance measures also form a meaningful element of
Executive Directors' annual remuneration. A definition of the adjusted
performance measures and a reconciliation to the closest IFRS equivalent are
disclosed below. The term 'adjusted' is not defined under IFRS and may
therefore not be comparable with similarly titled measures reported by other
companies. Adjusted performance measures are not considered to be a
substitute for, or superior to, IFRS measures.
Adjusted operating profit
Adjusted operating profit excludes items that are considered to be significant
in nature and/or quantum at either a Group or an operating segment level and
where treatment as an adjusted item provides stakeholders with additional
useful information to assess the period-on-period trading performance of the
Group. The Group excludes such items including those defined as follows:
· Amortisation and impairment of acquisition-related intangible assets
· Costs associated with the acquisition or disposal of businesses
· Gain or loss on disposal of a subsidiary and / or disposal groups
· Reversal of acquisition-related fair value adjustments to inventory
· Changes in deferred and contingent consideration payable on
acquisitions
· Costs associated with a material restructuring
· Material gains or losses on disposal of property
· Accelerated depreciation, impairment and other related costs on
non-recurring, material property redevelopments
· Material non-recurring pension costs or credits
· Costs or credits arising from regulatory and litigation matters
· Other material items which are considered to be non-recurring in
nature and / or are not a result of the underlying trading of the business
· Related tax effect on adjusting items above and other tax items which
do not form part of the underlying tax rate
A reconciliation between operating profit as reported under IFRS and adjusted
operating profit is given below.
Six months to 30 June 2025 Six months to 30 June 2024 Year ended 31 December 2024
£m £m £m
Operating profit as reported under IFRS 106.8 147.2 304.6
Restructuring costs 32.5 - -
Amortisation of acquisition-related intangible assets 17.4 17.3 34.1
Asset related impairment 2.1 - 5.7
Acquisition-related items - (4.2) (7.3)
Disposal of Associate - - (3.2)
Total adjusting items 52.0 13.1 29.3
Adjusted operating profit 158.8 160.3 333.9
Tax on adjusting items
Six months to Six months to Year ended
30 June 2025 30 June 2024 31 December 2024
Adjusted Adj't Total Adjusted Adj't Total Adjusted Adj't Total
£m £m £m £m £m £m £m £m £m
UK Corporation tax 3.9 - 3.9 (1.9) - (1.9) 7.4 - 7.4
Foreign tax 34.9 (3.7) 31.2 35.6 - 35.6 71.1 (3.7) 67.4
Deferred tax (0.4) (9.5) (9.9) 3.0 (3.2) (0.2) (1.5) (5.8) (7.3)
Total taxation 38.4 (13.2) 25.2 36.7 (3.2) 33.5 77.0 (9.5) 67.5
Effective tax rate 27.4% 25.3% 28.7% 26.5% 24.4% 26.7% 26.5% 30.4% 26.1%
The adjusted effective tax rate is calculated as a percentage of profit before
tax and a share of profits of associates.
Adjusted earnings per share
Six months to 30 June 2025 Six months to 30 June 2024 Year ended 31 December 2024
Profit for the period attributable to equity holders as reported under IFRS 62.7 91.2 191.2
(£m)
Items excluded from adjusted operating profit disclosed above (£m) 52.0 13.1 29.3
Tax effects on adjusted items (£m) (13.2) (3.2) (9.5)
Adjusted profit for the period attributable to equity holders (£m) 101.5 101.1 211.0
Weighted average shares in issue (million) 73.7 73.6 73.7
Basic adjusted earnings per share 137.6p 137.2p 286.3p
Diluted weighted average shares in issue (million) 73.9 73.8 73.9
Diluted adjusted earnings per share 137.3p 136.9p 285.6p
Basic adjusted earnings per share is defined as adjusted profit for the period
attributable to equity holders divided by the weighted average number of
shares in issue. Diluted adjusted earnings per share is defined as adjusted
profit for the period attributable to equity holders divided by the diluted
weighted average number of shares in issue.
Basic and diluted EPS calculated on an IFRS profit basis are included in Note
5.
Adjusted cash flow
Adjusted cash from operations is used by the Board to monitor the performance
of the Group, with a focus on elements of cashflow, such as net capital
expenditure, which are subject to day-to-day control by the business. A
reconciliation showing the items that bridge between net cash from operating
activities as reported under IFRS to adjusted cash from operations is given
below:
Six months to Six months to 30 June 2024 Year ended
30 June 2025 £m 31 December 2024
£m £m
Net cash from operating activities as reported under IFRS 97.5 93.1 312.8
Restructuring and acquisition-related costs 12.9 2.5 2.4
Share of loss of Associate - 0.5 -
Net capital expenditure excluding acquired intangibles from acquisitions (34.3) (39.7) (83.6)
Income tax paid 29.7 37.9 76.5
Repayments of principal under lease liabilities (8.8) (8.7) (16.6)
Adjusted cash from operations 97.0 85.6 291.5
Adjusted cash conversion in the first half was 61% (30 June 2024: 53%).
Adjusted cash conversion is calculated as adjusted cash from operations
divided by adjusted operating profit. The adjusted cash flow is included on
page 12.
Net debt including lease liabilities
A reconciliation between net debt and net debt including lease liabilities is
given below. A breakdown of the balances that are included within net debt
is given in Note 8. Net debt excludes lease liabilities to be consistent
with how net debt is defined for external debt covenant purposes, as well as
to enable comparability with prior years.
30 June 2025 30 June 2024 31 December 2024
£m £m £m
Net debt 658.0 718.3 596.2
Lease liabilities 89.8 96.0 95.1
Net debt including lease liabilities 747.8 814.3 691.3
Net debt to earnings before interest, tax, depreciation and amortisation
(EBITDA)
To assess the size of the net debt balance relative to the size of the
earnings for the Group we analyse net debt as a proportion of EBITDA. EBITDA
is calculated by adding back depreciation and amortisation of owned property,
plant and equipment, software and development to adjusted operating profit.
For half year calculations, this is based on the results for the last 12
months all translated at the exchange rate used for the half year period.
Net debt is calculated as Cash and cash equivalents less Bank overdrafts,
Short-term borrowings and Long-term borrowings (excluding Short-term and
Long-term lease liabilities). The net debt to EBITDA ratio is calculated as
follows:
12 month period to 30 June 2025 12 month period to 31 December 2024
£m
£m
Adjusted operating profit 329.3 333.9
Depreciation and amortisation of property, plant and equipment, software and 44.3 42.5
development
EBITDA 373.6 376.4
Net debt 658.0 596.2
Net debt to EBITDA 1.8x 1.6x
Organic measures
As we are a multi-national Group of companies, who trade in a large number of
foreign currencies and also acquire and sometimes dispose of companies, we
also refer to organic performance measures throughout the News Release.
These strip out the effects of the movement of foreign currency exchange rates
and of acquisitions and disposals. The Board believe that this allows users
of the accounts to gain a further understanding of how the Group has
performed. Exchange translation movements are assessed by re-translating
prior period reported values to current period exchange rates. Exchange
transaction impacts on operating profit are assessed on the basis of
transactions being at constant currency between years.
The incremental impact of any acquisitions that occurred in either the current
period or prior period is excluded from the organic results of the current
period at current period exchange rates. For any disposals that occurred in
the current or prior period, the current period organic results include the
difference between the current and prior period financial results only for the
like-for-like period of ownership.
The organic percentage movement is calculated as the organic movement divided
by the prior period at current period exchange rates, excluding disposals for
the non like-for-like period of ownership. The organic bps change in
adjusted operating profit margin is the difference between the current period
margin, excluding the incremental impact of acquisitions, and the prior period
margin excluding disposals for the non like-for-like period of ownership at
current period exchange rates.
A reconciliation of the movement in revenue and adjusted operating profit
compared to the prior period is given below:
Six months to 30 June 2024 Six months to 30 June 2025 Organic Reported
£m Exchange Organic £m
£m £m
Revenue
Steam Thermal Solutions 430.8 (17.5) 0.9 414.2 - (4)%
Electric Thermal Solutions 197.7 (4.6) 19.2 212.3 10% 7%
Watson-Marlow Fluid Technology Solutions 198.5 (6.0) 3.2 195.7 2% (1)%
Total 827.0 (28.1) 23.3 822.2 3% (1)%
Steam Thermal Solutions excluding large projects in China & Korea 373.6 (15.0) 9.2 367.8 3% (2)%
Adjusted operating profit
Steam Thermal Solutions 101.2 (7.0) 2.8 97.0 3% (4)%
Electric Thermal Solutions 29.1 (0.8) 3.5 31.8 12% 9%
Watson-Marlow Fluid Technology Solutions 48.8 (3.6) 5.4 50.6 12% 4%
Corporate (18.8) - (1.8) (20.6) 9% 10%
Total 160.3 (11.4) 9.9 158.8 7% (1)%
Adjusted operating profit margin 19.4% 19.3% 70bps (10)bps
Analysis by operating segment
Adjusted Adjusted
Six months to 30 June 2025 operating operating
Revenue profit/(loss) profit margin
£m £m %
Steam Thermal Solutions 414.2 97.0 23.4%
Electric Thermal Solutions 212.3 31.8 15.0%
Watson-Marlow Fluid Technology Solutions 195.7 50.6 25.9%
Corporate - (20.6)
Total 822.2 158.8 19.3%
Net finance expense (18.6)
Share of loss of Associate (0.3)
Adjusted profit before taxation 139.9
Adjusted Adjusted
Six months to 30 June 2024 operating operating
Revenue profit/(loss) profit margin
£m £m %
Steam Thermal Solutions 430.8 101.2 23.5%
Electric Thermal Solutions 197.7 29.1 14.7%
Watson-Marlow Fluid Technology Solutions 198.5 48.8 24.6%
Corporate - (18.8)
Total 827.0 160.3 19.4%
Net finance expense (21.9)
Share of loss of Associate (0.5)
Adjusted profit before taxation 137.9
Year ended 31 December 2024 Adjusted Adjusted
operating operating
Revenue profit/(loss) profit margin
£m £m %
Steam Thermal Solutions 867.9 204.1 23.5%
Electric Thermal Solutions 404.6 64.7 16.0%
Watson-Marlow Fluid Technology Solutions 392.7 99.0 25.2%
Corporate - (33.9)
Total 1,665.2 333.9 20.1%
Net finance expense (43.7)
Share of loss of Associate (2.0)
Adjusted profit before taxation 288.2
The reconciliation for each operating segment for adjusting items is analysed
below:
Six months to 30 June 2025 Amortisation Asset related impairment Total
of acquired intangibles Restructuring costs £m £m
£m £m
Steam Thermal Solutions (2.9) (25.8) (2.1) (30.8)
Electric Thermal Solutions (12.7) (1.3) - (14.0)
Watson-Marlow Fluid Technology Solutions (1.8) (5.2) - (7.0)
Corporate expenses - (0.2) - (0.2)
Total (17.4) (32.5) (2.1) (52.0)
Six months to 30 June 2024 Amortisation Acquisition-related items Total
of acquired intangibles £m £m
£m
Steam Thermal Solutions (2.6) - (2.6)
Electric Thermal Solutions (13.2) 4.2 (9.0)
Watson-Marlow Fluid Technology Solutions (1.5) - (1.5)
Corporate expenses - - -
Total (17.3) 4.2 (13.1)
Year ended 31 December 2024 Amortisation Asset related impairment Acquisition- related items Disposal of Associate Total
of acquired intangibles £m £m £m £m
£m
Steam Thermal Solutions (5.2) - - - (5.2)
Electric Thermal Solutions (25.9) - 7.3 - (18.6)
Watson-Marlow Fluid Technology Solutions (3.0) (5.7) - - (8.7)
Corporate expenses - - - 3.2 3.2
Total (34.1) (5.7) 7.3 3.2 (29.3)
CAUTIONARY STATEMENTS
This Half Year Report contains forward-looking statements. These have been
made by the Directors in good faith based on the information available to them
up to the time of their approval of this Report. The Directors can give no
assurance that these expectations will prove to have been correct. Due to
the inherent uncertainties, including both economic and business risk factors
underlying such forward-looking information, actual results may differ
materially from those expressed or implied by these forward-looking
statements. The Directors undertake no obligation to update any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
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