Spirax Group PLC's (LSE:SPX) shares jumped 15% after the company reported a strong first half, with revenue and profits ahead of expectations and promising signs across key divisions.
Peel Hunt highlighted group revenue of £822 million, beating consensus estimates, and adjusted operating profit rose to £159 million, delivering a margin of 19.3%, well above forecasts.
Earnings per share came in at 138p, also exceeding analyst predictions. Net debt was slightly lower than expected, helped by reduced capital expenditure and a UK tax refund, leaving Spirax in a solid financial position.
Organic growth improved to 3%, led by a 10% increase in the Electrical Thermal Solutions (ETS) division and modest gains in Watson-Marlow, while the Steam and Thermal Transfer segment was flat. Margins surprised positively across segments, further boosting investor confidence.
While the outlook remains cautious amid macroeconomic uncertainty, Peel Hunt notes Spirax’s upbeat commentary on stronger biopharma orders and semiconductor activity, helping to ease concerns about the second half.
Shore Capital has put its 'sell' recommendation under review after the results, noting the share price has fallen below its earlier estimate of its fair value at £61.
It is now trading at about 22 times expected earnings for 2025, or 14 times earnings before interest, tax, depreciation and amortisation.
Because of this, ShoreCap plans to reassess our view. Stifel, meanwhile, remains in the 'sell' camp.
The shares rose 780p to 6,840p.