Spirax-Sarco Engineering PLC on Thursday said sales growth slowed over the last few months amid a ‘subdued trading environment’, leaving revenue so far in 2023 down on a year before, although it expects to resume revenue growth next year.

The Cheltenham, England-based thermal energy management and pumping company said that in the four months that ended on October 31, sales growth across all three of its businesses failed to meet expectations.

For the first ten months of 2023, group revenue was ‘marginally below’ levels for the same period in 2022. Additionally, Spirax-Sarco said currency effects hurt sales and adjusted operating profit.

Spirax-Sarco said organic sales growth in Steam Specialities was ‘well below the very strong 15%’ achieved in the first half of 2023.

However, Spirax-Sarco said the division continued to grow ‘despite the weakening macro-economic environment’. For instance, it noted that industrial production growth or IP in key European and Asian markets is forecast to contract this year.

Demand growth in Electric Thermal Solutions ‘remained strong’ and the order book increased. However, weak demand continued from industrial equipment customers in the Semicon WFE, and sales growth failed to meet demand due to ongoing operational improvements.

The weakening macro-economic environment also hurt demand from Process Industries sector customers. Meanwhile in the Watson-Marlow business, Spirax-Sarco said demand from Biopharm customers ‘remained broadly in line’ with demand in the first half year.

Spirax-Sarco anticipates an adverse impact of approximately 1.5% on full-year sales and profit if current exchange rates prevail for the rest of 2023.

Excluding this, Spirax-Sarco expects full-year sales to be between 1% and 2% lower than the £1.73 billion delivered in 2022. Additionally, it expects Biopharm and Semicon WFE sector demand to recover next year, and ‘[remains] confident in our continued ability to drive growth above IP’.

‘Therefore, while it is too early to provide guidance for 2024, we do anticipate a return to revenue growth and improvement in adjusted operating margin in the coming year,’ Spirax-Sarco explained.

Shares in Spirax-Sarco Engineering were up 1.7% at 9,092.00 pence in London on Thursday morning.

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