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Spectris splashes out with special dividend despite challenging markets

As well as declaring a final dividend of 43.2p per share, the board also pledged to shell out another 150p via a special dividend

Spectris PLC -

Spectris PLC (LON:SXS) proposed a special dividend of 150p per share after growing profits more than expected last year, but said the first half of 2020 will “remain challenging” even without taking coronavirus into account.

The instrumentation and controls company generated sales of £1.6bn in 2019, up 0.4% on a like-for-like basis, while operating profits came in at £258.1mln, up 3.9% year on year and better than many analysts had forecast.

An improvement in cashflow meant the company ended the year with net cash of £33.5mln thanks to the inflow of £262.7mln from the sale of paper industry specialist BTG, and then post-year end has announced the sale of its interest in environmental monitoring business EMS Brüel & Kjær in a small cash and shares deal.

As well as declaring a final dividend of 43.2p per share that gives a total of 65.1p for the year, up 7%, the board also pledged to shell out £175mln to shareholders via a special divi funded by debt.

“This will take the group's leverage to 0.4x, still leaving sufficient headroom for M&A, which remains a central part of our strategy,” Spectris said.

Chief executive Andrew Heath said the growth last year was a result of progress made in executing the ‘Strategy for Profitable Growth’ — ie closing several facilities, reduced headcount and retiring lower margin products — in the face of a weakening macroeconomic backdrop. 

“We are intent on further improving our operating margin, to at least previous highs, and enhancing capital returns, as we continue to work on asset optimisation and managing the portfolio,” he said.

“Absent a material impact from coronavirus, for 2020, we anticipate that markets will remain challenging in the first half with a recovery only currently forecasted to emerge later in the year.”

Quick facts: Spectris PLC

Price: 3131 GBX

Market: LSE
Market Cap: £36.44 m

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