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“2007 was a successful year, in which the company delivered a return on sales in excess of 15%” |
Overview
Spectris performed well in 2007, with sales, profits and earnings per share all increasing compared with the prior year, after adjusting for disposals and acquisitions. Total group sales were £668.4 million compared with £684.5 million in the prior year. Excluding the effect of disposals during the first half of 2007, sales from continuing businesses increased by 2.7% to £659.8 million (2006: £642.6 million), or 6.5% at constant currencies.
Total group adjusted operating profit increased by 22% to £104.8 million (2006: £85.7 million)*. Operating margins increased by 2.9 percentage points to 15.8% of sales. Profit before tax increased by 28% to £98.0 million (2006: £76.3 million) and earnings per share increased by 33% to 58.1p (2006: 43.7p). Operating cash conversion was strong, with 99% of operating profit converted to operating cash. Net proceeds from disposals were £29.8 million. The buy-back of 8.9 million shares during 2007 absorbed £79.2 million, with the result that net debt at the end of the year was £77.3 million, compared with £71.7 million at the end of December 2006. Net interest costs were £6.7 million, giving an annualised cover of 15.6 times.
The Board proposes to pay a final dividend of 15.25p which, combined with the interim dividend of 5.75p, gives a total of 21.0p (2006: 17.5p), an increase of 20%. The dividend will be paid on 20 June 2008 to shareholders on the register at 30 May 2008.
Board changes
As previously announced, Andrew Given retired at the May 2007 AGM and John Hughes joined the Board as a non-executive director in June. Stephen Harris, Business Group Director, resigned from the Board on 31 January 2008. I shall be standing down at the May 2008 AGM, as announced in November 2006, after twenty years with the company and will be succeeded as Chairman by John Hughes. To him, to the rest of the Board, and to everyone at Spectris, I convey my thanks and best wishes for continuing success and prosperity.
Outlook
2007 was a successful year, in which the company delivered a return on sales in excess of 15%. Our broad spread of geographies and end user markets, and strong product offering, ensure that we are well placed to maintain good progress despite an economic outlook which is less certain. The current year has started well, with encouraging prospects across the multiple industries and regions we serve.
John Poulter
Chairman
* Unless otherwise stated, all sales and operating profit figures in the narrative are on a continuing businesses basis and exclude the businesses divested. Figures for operating profit, profit before tax and earnings per share are adjusted measures – for explanation of adjusted figures and reconciliation to the statutory reported figures see Note 3.