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Spectris maintains full year guidance as it ramps up cost savings programme

The new chief executive of Spectris has kicked off a strategy review of the business to "reduce complexity" and establish a "more focused" organisation targeting higher growth markets

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Shares rose more than 10% in morning trading

Spectris plc (LON:SXS) shares jumped as it posted an 8% increase in quarterly like-for-like sales, led by strong demand in China and Japan.

In a trading update covering July 1 to October 31, the instrumentation and controls company said total sales gained 9% on a reported basis with growth across all its markets and divisions.

READ: Spectris’ soon-to-be new boss joins board as CEO designate

The growth in like-for-like sales was driven by the Asia unit and the materials analysis segment on the back of strong demand in the pharmaceutical and semiconductor industries.

The group maintained its full-year guidance and said it has decided to implement a “more comprehensive” cost reduction programme in 2019 to improve its operating margins, which remain below historic highs and that of its peers. 

"In addition, we need a sharper focus on asset optimisation, capital allocation discipline and portfolio composition,” said Andrew Heath, who became chief executive in September.

“We have therefore commenced a strategic review, which will explore the potential to reduce complexity and establish a more focused organisation targeting higher growth markets where we have a competitive advantage.

“The explicit objective is to develop and execute our strategy for profitable growth, as the basis for delivering a significant and sustainable increase in shareholder value.”

Heath plans to update investors on his strategy at the full year results in February. 

In mid-morning trading, shares rose 10.3% to 2,320p. 

Quick facts: Spectris PLC

Price: 2586 GBX

LSE:SXS
Market: LSE
Market Cap: £3 billion
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