LONDON (ShareCast) - (Sharecast News) - Thermal energy and fluid technology firm Spirax Group said on Tuesday that first‑half profits rose sharply, with margins also improving as it delivered organic growth ahead of global industrial production and reiterated its full‑year guidance.
However, Spirax also cautioned that corporate costs would be higher this year due to increased investment in digital and services. Spirax said corporate costs would rise versus 2025 as it continued to invest in future growth initiatives, particularly across digital and services. Excluding those investments, underlying corporate costs were expected to grow broadly in line with inflation, while net financing costs, its effective tax rate and cash conversion were anticipated to be similar to last year.

Statutory operating profit jumped 44% to £154.2m, widening the margin by 490 basis points to 17.9%, while adjusted operating profits rose 8% to £171.1m, with the adjusted margin nudging up to 19.8% from 19.3%. Group revenues increased 5% to £863.8m, well ahead of global IP of 1.8%.

Steam thermal solutions delivered 1% organic sales growth, with demand running at more than twice IP, while margins eased to 22.0%, reflecting shipment phasing and first‑half investment. However, Spirax expects higher second‑half margins and a full‑year outcome broadly in line with 2025.

Spirax's electric thermal solutions unit posted 11% organic sales growth, supported by strong demand across all divisions, including double‑digit Semicon growth. Margins expanded 220 basis points to 17.2% on operating leverage, improved mix and the absence of lower‑margin legacy orders.

Watson-Marlow fluid technology solutions grew 7% organically, with biopharmaceutical orders ahead of sales and Ppocess industries continuing to gain share. Margins improved 80 basis points to 27.5%.

Looking ahead, Spirax, which hiked its interim dividend by 3% to 50.4p, reiterated guidance for mid‑single‑digit organic revenue growth and further organic margin progress in FY26, with all three businesses expected to deliver higher second‑half sales and margins.

Jefferies said the market would likely take the $55m drop in free cash flow "negatively" as it would "reduce confidence in timing of future buybacks", while Barclays said that management's confidence in "a material H226E EBITDA step​-​up, alongside an expected strong H226E FCF run rate", would provide "comfort that IWG is able to capitalise on structurally supported, global flex​-​office demand". AJ Bell's Dan Coatsworth noted that Spirax's early losses came as investors were "disappointed by the lack of upgrades to earnings guidance in its half-year results".

As of 0815 BST, Spirax shares were down 5.82% to 7,205p.







Reporting by Iain Gilbert at Sharecast.com

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