Spirax-Sarco Engineering PLC on Thursday backed its 2022 adjusted profit outlook, excluding contributions from the recent acquisitions.

The FTSE 100 listing is a Cheltenham, Gloucestershire-based thermal energy management and pumping company.

Shares were down 3.0% at 11,255.00 pence each on Thursday morning in London.

It said the global industrial production growth, IP, is now forecasted to be 2.9% in 2022, lower than 3.5% forecasted in July, although ‘still above pre-pandemic levels’. For 2023, the IP forecast has also been revised downwards to 1.0%, from 3.2% in July.

However, Spirax-Sarco said underlying demand growth remained strong in the four months to the end of October despite the weakening IP forecast. Group organic sales also grew strongly.

Spirax-Sarco said for 2022, it expects close to 15% organic growth for Watson-Marlow’s sales to the Pharmaceutical & Biotechnology sector, as well as growth very ‘significantly above IP for the remainder of its organic revenue’.

‘Our guidance for the Group’s full year 2022 adjusted operating profit, excluding contributions from the recent acquisitions, remains unchanged,’ the company noted.

Looking ahead to 2023, the company expects at least ‘mid-single-digit group organic sales growth, together with a small operating margin progression’.

In September, the company completed the acquisition of Paris-based industrial heating group Vulcanic SA for €261.7 million on a cash and debt free basis. Following the completion of the Vulcanic acquisition, Spirax-Sarco said its net borrowings on October 31 were £391 million, up from £203 million on June 30.

In August, Spirax-Sarco said pretax profit in the half-year to June 30 fell to £138.5 million from £150.0 million a year ago. Revenue grew 17% to £750.1 million from £643.7 million.

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