Spirax-Sarco sees "good progress" in 2013 despite sluggish markets

7th Nov 2013 11:19

Spirax-Sarco Engineering said it was confident it would make "good progress" in 2013 despite challenging conditions in its mature markets of Europe and North America.The British engineering company, which makes pumps that are used by a range of industries including bakeries and dairies, reported organic sales had risen 4% in the four months to the end of October in line with the sales growth it reported in the first half. It said recent improvements in global economic conditions had had little impact on its markets. In Europe and North America, maintenance spending by customers had remained stable but higher value energy saving and plant improvement expenditure had been at low levels, it said.However, it has seen continued strong growth in China and growth in Latin America had more than offset soft demand in North America.Its operating margins were "comfortably" ahead of last year, helped by cost savings from its restructuring last year at its European sales businesses, it said.Spirax-Sarco reported its net cash balance stood at £22m at the end of October after paying out £78m in its special dividend in July.Shares in Spirax-Sarco were up 1% at 2961p at 11:22 on Thursday. Investec analyst Michael Blogg said: "We believe that the group has reinforced its reputation for steadiness and quality. "Some recent underperformance of the shares allows us to move our recommendation to buy."TB