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Spectris sales fall but manufacturing back to full capacity

Like-for-like sales were down 6% in North America, 13% in Europe and 20% in Asia

Spectris PLC -

Spectris PLC (LON:SXS) reported a 12% decline in like-for-like sales for the first four months of 2020 despite a strong rebound in China last month.

Currently, all of the instrumentation and controls company's manufacturing sites are operating at or near full capacity, with disruption to its activities and the supply chains said to have been “limited and manageable to date”.

LFL sales for the four-moth period were down 6% in North America, 13% lower in Europe, 20% in Asia and 3% in the rest of the world. 

The FTSE 250 company, which declared a special dividend in February but then withdrew it in March and postponed its final dividend, said cash generation had been strong, with 150% cash conversion. 

Overhead costs were 9% lower in the four month period, with cost saving initiatives including 25% salary reductions for some of the board, hiring freezes and reducing discretionary capex. 

Net cash stood at £60mln on 30 April, up from £33.5mln at the end of last year, plus £827.5mln of committed banking facilities. 

Broker Shore Capital said it was maintaining its 'sell' recommendation, highlighting "the difficulties Spectris is likely to be facing in serving its international customer base due to travel restrictions, the increased cost of flights and logistics, difficulties accessing customers' sites and weakness in end markets". 

Analysts at broker Peel Hunt said, "we believe this was a very solid performance, but we do expect sales to deteriorate further through the balance of the quarter" but were reassured by the company's "great liquidity".

The shares fell 5% to 2,553p on Friday morning.

 

Quick facts: Spectris PLC

Price: 2688 GBX

LSE:SXS
Market: LSE
Market Cap: £3.12 billion
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