Spectris shares bounce following special dividend payment

Spectris shares bounce following special dividend payment

Shares in Spectris plc (LON:SXS) have jumped following a strong set of 2019 full year results.

Following these strong results, the firm has decided to pay a special dividend which has been driven by its strong performance and its restructuring program.

The Chief Executive said: “We have announced a special dividend of £175 million, in line with our capital allocation policy. 2019 has been a year of delivery upon which to build in 2020. 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.”

The firm reported pretax profit of £259.3 million in 2019 – this represented a 19% growth from the £218 million figure just one year ago.

Notably, revenues also jumped by 1.7% to £1.63 billion from £1.6 billion.

On an organic, constant currency like-for-like basis, revenue increased by 0.4%, Spectris said. The sales contribution from acquisitions were broadly offset by disposals, and there was a 1.5% positive impact from foreign currency exchange movements.

The firm added that its profit improvement program lead to annualized benefits of £25.5 million, as restructuring costs incurred totaled £52.2 million.

The firm declared an annual dividend payment of 65.1 pence, which shows a 6.7% rise from 61p paid for 2018.

Spectris notably proposed a £175 million special dividend and share consolidation. The special dividend of 150p has been noted, and the firm said that in order to maintain the comparability of the company’s share price  a supporting share consolidation will take place – subject to shareholder approval.

Andrew Heath, Chief Executive, said:

“2019 saw demonstrable progress in executing our Strategy for Profitable Growth. The successful delivery of our profit improvement programme, combined with an increased emphasis on deploying the Spectris Business System, enabled us to deliver increased profit and operating margin expansion, against a weakening macroeconomic backdrop …

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. We expect limited top-line growth and will, therefore, continue to concentrate on self-help initiatives to drive further cost-efficiency and ensure a more resilient and profitable business.

The combination of focusing on our customers, driving operating leverage and the repositioning and simplification of our portfolio, alongside a refreshed capital allocation framework, form the basis for delivering a significant and sustainable increase in shareholder value.”

Shares in Spectris trade at 2,874p (+5.04%). 20/2/20 13:36BST.