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Spirax-Sarco Engineering 4-month Operating Profit Ahead Of Last Year

Spirax-Sarco Engineering PLC (SPX.L) said Wednesday that despite the softening macro-economic environment, Group operating profit on an organic basis was ahead of the comparable four-month period in 2018, with operating margins consistent with the company's full-year expectations.

In addition, the company's organic sales growth for the Group in the first four months of the year remained at similar levels to the second half of 2018.

Growth in Asia Pacific was particularly strong, aided by large one-off projects and customer requests to pull forward sales ahead of the recent changes to VAT in China.

In EMEA, the company saw a modest benefit from customers building buffer stocks ahead of the UK's anticipated exit from the European Union on March 29, while the Americas saw similar levels of growth to the prior year.

However, the company noted that as expected, the global macro-economic environment continued to weaken. The latest forecast for global Industrial Production growth for 2019 is 2.0 percent, down from 2.6 percent at the time of the company's preliminary announcement and down from 3.1 percent in 2018.

Looking ahead, Spirax-Sarco noted that the lowering of forecasts for Industrial Production growth rates for 2019 meant that the company's overall expectations of organic growth and trading margins for the full-year are unchanged to those set out in its preliminary announcement in March.

According to the company, if current exchange rates were to prevail for the remainder of the year, there would be no material impact of translation or transaction on sales and operating profit for the full year, compared with the full year 2018.

Separately, Spirax-Sarco announced board changes. The company noted that Kevin Thompson will join the Board as an Independent Non-Executive Director, with immediate effect.

Thompson will succeed Clive Watson as Chair of the Audit Committee, following a handover of responsibilities, after the close of the company's Annual General Meeting today. Thompson was Group Finance Director of Halma plc from 1998 to 2018.

Watson is standing down after having served as a Director and Chair of the Audit Committee for nine years, in addition to being the Senior Independent Director since 2018. Dr Trudy Schoolenberg will take over as Senior Independent Director, after the close of the AGM today.

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