Shares in FTSE 100 thermal energy management and pumps firm Spirax-Sarco Engineering (SPX) topped the index, trading close to record highs up 3.8% to £157 as the company booked a 41% rise in first-half profit, boosted in part by vaccine-related demand.

Over the last 10 years Spirax has delivered a total return of 873%.

Pre-tax profit for the six months through June increased to £150 million, up from £106.3 million year-on-year, as revenue climbed 13% to £643.7 million.

Spirax‐Sarco Engineering declared an interim dividend of 38.5p per share, up 15% year-on-year.


‘A strong recovery of global industrial production, combined with exceptional Covid-19 vaccine-related demand in Watson-Marlow, has supported strong organic sales and profit growth across all three businesses,’ chief executive Nicholas Anderson said.

Shore Capital analysts Tom Fraine and Akhil Patel took a balanced view of the company’s prospects. They commented: ‘In the long-term, we believe Spirax can continue gaining market share and grow ahead of the wider sector.

'We previously suggested its share of the fragmented steam specialties and electric thermal solutions markets could still be as low as 30% by 2030, even with the current rate of market share gains continuing, leaving plenty of room for future growth beyond a 10-year horizon.

‘However, we think the risks the company faces may be greater than the market perceives with only around half of its revenue driven by defensive markets. Although c.50% of Spirax’s revenue is driven by small £1,000 to £2,000 tasks, its growth is still largely dependent on increased industrial production and whilst near-term forecasts indicate positivity, there is still a degree of uncertainty.

‘Additionally, the group’s average order book is seven weeks, so there is very limited visibility.’


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Issue Date: 11 Aug 2021