Spectris plc

Reported sales increased 6% to £570.2 million. On a like-for-like basis, sales grew 11% versus 2021, while orders were up 20% like-for-like. Adjusted operating profit increased 6% to £72.3 million and adjusted operating margin was flat at 12.7% (like-for-like margin down 60 basis points). Adjusted profit before tax was £70.3 million, adjusted EPS was 49.8p, and the tax rate was 22%. Gross margin was lower in H1 due to pricing lag, inflation and supply disruption. Full-year guidance was for high-single-digit organic sales growth and margin expansion, with gross margin expected to recover progressively in H2 as earlier price increases come through. Capex is expected at £50 million to £60 million, SaaS costs around £20 million, additional R&D spend for 2022 about £15 million, tax rate 22%, and working capital within the previously guided 11% to 15% range.

Andrew Heath framed the first half as proof that Spectris’ strategy for profitable growth is working, citing stronger customer focus, a more focused portfolio, and better execution through the Spectris Business System. He emphasized that the company is now more resilient and better positioned in attractive end markets, with sustainability-linked growth themes and M&A as added supports. His tone was confident and constructive, but he repeatedly acknowledged supply chain disruption, inflation and China lockdowns as near-term issues to watch.

Derek Harding led with the key numbers: £570.2 million of reported sales, £72.3 million of adjusted operating profit, 12.7% adjusted operating margin, £70.3 million of adjusted PBT, and 49.8p adjusted EPS. He explained that cash conversion was depressed by higher working capital, especially inventory, and by £31.6 million of capex, including a £20 million PMS facility investment; he expects cash conversion to return toward the normal 80% to 90% range in H2. He also highlighted net debt of £98.3 million at June-end, net debt/EBITDA of 0.6x, £410 million Omega proceeds received in early July, and ongoing capital allocation through a 5% dividend increase and £150 million of buybacks in H1.

Analysts focused on R&D intensity, pricing versus inflation, the H1/H2 margin bridge, supply chain risk, and M&A. Management said R&D has moved above the historical 6% to 7% range because of strategic investment, portfolio mix after Omega, and some engineering effort devoted to supply-chain fixes, but it expects that effort to unwind over time. On pricing, management said price increases are sticking and should deliver about 4% to 5% pricing benefit in H2; on supply chains, it said electronics and semiconductors remain the main bottleneck, especially for HBK and Red Lion, but conditions may be easing and order cancellations have not increased.