Spectris expects 57% fall in first-half profit

Thursday, 16th July 2009

Instrumentation and controls group Spectris says sales are down 20% in the first half on a constant currency basis.

It expects an interim operating profit of around £20m, a 57% drop compared with the 2008 figure of £46.4m.

Restructuring charges, including post-acquisition integration charges, will be around £7m in the first half, with at least a further £3m estimated for the second half.

On a reported basis, sales for the six months to end June are expected to be up 4%, including a 7% contribution from acquisitions and beneficial effects from currency of 17%.

The group says, 'Demand across business segments and major geographical regions continued to be weak, particularly in the automotive and mining sectors.

'However, research and environment-related areas showed greater resilience.

'Despite market conditions, gross margins improved on a constant currency organic basis.'

Net debt has increased 10% since the year end, partly due to the acquisition of Lochard in February for an initial £19m.

Spectris says visibility of customer demand remains limited. 'However, we expect to see an improving performance in the second half resulting from the benefits of the restructuring and post-acquisition integration actions as well as anticipating some improvement in the level of business.'

Interim results are due to be released on August 25.

Story provided by Business Financial Newswire