Spectris plc – 2025 half year results
7 August 2025 – Spectris plc (SXS: LSE), the expert in providing insight through precision measurement, announces half year results for the six months ended 30 June 2025.
Topline momentum and strategic actions support full-year management expectations
· 5% reported order growth (-2% LFL), with 15% growth in Q2 (4% LFL)
· 8% reported sales growth (1% LFL), with 20% reported sales growth in Q2 (9% LFL)
· More than £10 million of savings realised so far from our Profit Improvement Programme in H1; over £30 million of savings expected for the full year
· Adjusted operating profit of £65.6 million (H1 2024: £61.1 million), in line with last year on LFL basis
· Statutory operating profit of £24.8 million (H1 2024: £24.0 million)
· Net debt of £546 million; leverage expected to return back within the 1-2x target by the end of 2025
· Full year adjusted operating profit expected to be in line with management expectations
· The Board has recommended KKR’s prospective acquisition of the Group at an offer value of £41.75 per share (inclusive of our 28.0 pence per share interim dividend, which has now been declared in the ordinary course)
Andrew Heath, CEO, said:
“We have transformed the Group since 2018 into a portfolio of high-quality businesses with attractive growth and margin profiles, positioning Spectris for sustained success. Our expectations for 2025 are supported by an improving sales outlook and order momentum, along with the expected benefits from recent acquisitions and efficiency programs.
We are achieving stronger synergies from acquisitions and our Profit Improvement Programme is firmly on track to deliver over £30 million of savings in 2025, two-thirds of which will be delivered in the second half. Consequently, with strong profit growth and cash generation, we are also well positioned to return leverage to back within our 1-2x target range by the end of 2025.
Our strategic investments and strong execution track record, underpinned by exceptional people and a healthy, high-performance culture, positions us well for the future.”
|
Adjusted1 H1 2025 |
Adjusted1 H1 2024 |
LFL change1 |
Statutory H1 2025 |
Statutory H1 2024 |
Statutory change |
|
|
Sales (£m) |
636.1 |
589.7 |
1% |
636.1 |
589.7 |
8% |
|
Operating profit (£m) |
65.6 |
61.1 |
Flat |
24.8 |
24.0 |
3% |
|
Operating margin (%) |
10.3% |
10.4% |
(10bps) |
3.9% |
4.1% |
(20bps) |
|
Profit before tax (£m) |
48.7 |
62.8 |
|
2.5 |
235.3 |
(99%) |
|
Basic earnings per share (pence) |
38.4p |
47.9p |
|
5.3p |
179.6p |
(97%) |
|
Cash generated from operations |
|
|
|
75.9 |
57.4 |
32% |
|
Adjusted cash flow conversion (%) |
126% |
111% |
|
|
|
|
|
Return on gross capital employed (%) |
12.2% |
16.8% |
|
|
|
|
|
Dividend per share (pence) |
|
|
|
28.0p |
26.6p |
5% |
1. Alternative performance measures (APMs) are used consistently throughout this press release and are referred to as ‘adjusted’ or ‘like-for-like’ (LFL). These are defined in full and reconciled to the reported statutory measures in the Appendix to the Condensed Consolidated Interim Financial Statements.
Recommended cash acquisition of Spectris by Project Aurora Bidco Limited
On 5 August 2025, the board of Project Aurora Bidco Limited (a special purpose vehicle indirectly wholly-owned by funds advised by Kohlberg Kravis Roberts & Co. L.P. and its affiliates) (KKR BidCo) and the Spectris plc board (the Spectris Board), announced that they had reached agreement on the terms of a recommended cash acquisition by KKR Bidco of the entire issued and to be issued share capital of Spectris plc (the KKR Acquisition). Under the terms of the KKR Acquisition, each Spectris shareholder will be entitled to receive £41.75 for each Spectris share they hold, comprising £41.47 in cash from KKR Bidco and an interim dividend of 28.0 pence to be paid by Spectris, which has now been declared in the ordinary course. It is intended that the KKR Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006.
Previously, on 23 June 2025, the board of MI Metron UK Bidco Ltd (an indirect subsidiary of funds managed and/or advised by Advent International, L.P.) (Metron Bidco) and the Spectris Board announced that they had reached agreement on the terms of a recommended cash acquisition by Metron Bidco of Spectris plc at an offer value of £37.63 per Spectris share (the First Advent Offer). Following the First Advent Offer, on 2 July 2025, the board of KKR Bidco and the Spectris Board announced they had reached agreement on the terms of a recommended cash acquisition by KKR Bidco of Spectris plc at an offer value of £40.00 per Spectris share (the First KKR Offer), and the Spectris Board withdrew its recommendation of the First Advent Offer.
Following the First KKR Offer, on 29 July 2025, the board of Metron Bidco and the Spectris Board announced that they had reached agreement on the terms of a recommended cash acquisition by Metron Bidco of Spectris plc at an offer value of £41.00 per Spectris share (the Second Advent Offer), and the Spectris Board withdrew its recommendation of the First KKR Offer.
In light of their subsequent recommendation of the KKR Acquisition, the Spectris directors decided unanimously to withdraw their recommendation of the Second Advent Offer.
In order to approve the terms of the KKR Acquisition, the required majority of Scheme Shareholders will need to vote in favour of the resolution to be proposed at the Court Meeting and the required majority of Spectris Shareholders will need to vote in favour of the special resolution to be proposed at the General Meeting. Subject to any further developments, the Court Meeting and the General Meeting are expected to be held on 27 August 2025.
The KKR Acquisition is also subject to the other terms and conditions set out in the scheme document which was published on 29 July 2025 in respect of the KKR Acquisition, including the receipt of certain antitrust approvals, including in the EU, the US and China and certain foreign investment approvals including in the UK. KKR Bidco will work with Spectris to engage constructively with all relevant stakeholders to satisfy these conditions, and the KKR Acquisition is expected to complete in or by Q1 2026.
Chief Executive’s Review
I would like to start by commending the great efforts of all my Spectris colleagues for their hard work and support in delivering a robust first half performance, in the face of both a challenging external environment and internal change.
We entered 2025 expecting a recovery in a number of our key end markets. While macroeconomic uncertainty and tariffs has led to continued customer caution, we delivered a robust first half performance. The improved momentum seen in the second quarter, particularly in Spectris Scientific, is encouraging and provides confidence in the outlook for the rest of 2025.
Our Profit Improvement Programme is a key driver of profit growth in 2025 and remains firmly on track to deliver over £30 million of cost savings, c.£20 million of which is to be delivered in the second half. In Spectris Scientific, the integration of Micromeritics and SciAps, and the implementation of a new organisational structure within Malvern Panalytical, has yielded additional cost synergy opportunities. Strong execution in both divisions provides upside to our original expectations, while still having the resources and capacity to fully benefit as end markets recover. With a full run rate of over £50 million of savings expected by the end of 2026, the Group is well positioned to drive adjusted operating profit margin towards our medium-term target of 20%+.
All three of the acquisitions we made last year, SciAps, Micromeritics and Piezocryst, are being successfully integrated with much of the work already completed. Their expected full-year incremental profit contribution is unchanged from our 2024 results in February, with a slightly higher weighting to the second half than previously anticipated. Encouragingly, the early customer feedback has been very positive and we see greater revenue synergy potential as a result. Last year’s acquisitions have both further strengthened the quality of the Group and expanded our customer offerings, which will help to drive long-term, sustainable and profitable growth.
Financial performance
Group order intake of £646.3 million was 5% higher on a reported basis than the prior period, with improved momentum in the second quarter. LFL order intake was 2% lower, after taking into account the £57.4 million impact of acquisitions, net of disposals, and adverse foreign exchange movements of £14.6 million. Growth in academia, materials and semiconductor were offset by weakness in automotive. By region, orders were lower in Europe and North America, partially offset by growth in Asia.
By division, Spectris Scientific orders were 17% higher on a reported basis and 2% higher on a LFL basis, and Spectris Dynamics orders were 3% lower on a reported basis and 7% lower on a LFL basis.
The order book at the end of June was £516.4 million and the book-to-bill ratio for the period was 1.02x.
Group sales for the first half were £636.1 million, 8% higher on a reported basis, again with strong momentum in the second quarter. LFL sales were 1% higher, after taking into account the £57.5 million impact of acquisitions, net of disposals, and adverse foreign exchange movements of £14.3 million. With LFL sales having been down 8% in the first quarter, we grew by 9% in the second quarter. Strong growth in academia, life sciences and materials was largely offset by declines in semiconductor and automotive. By region, sales in Europe and Asia were slightly higher, while North America was slightly lower.
Spectris Scientific sales were 21% higher on a reported basis and 3% on a LFL basis, against an easier year-on-year comparator, while Spectris Dynamics sales were flat on a reported basis and 3% lower on a LFL basis.
LFL sales performance across our end markets is set out in the table below with further information on end market trends contained in the divisional reviews for Spectris Scientific and Spectris Dynamics.
|
End market |
Sales H1 2025 (£m) |
Sales H1 2025 % of total Group |
LFL sales growth |
Expected medium-term market growth |
|
Life sciences / pharmaceutical |
123 |
19% |
7% |
5-7% |
|
Technology-led industrials |
109 |
17% |
1% |
5-7% |
|
Electronics and semiconductor |
68 |
11% |
(10%) |
6-8% |
|
Automotive |
66 |
10% |
(10%) |
4-6% |
|
Materials |
87 |
15% |
6% |
5-6% |
|
Academic research |
60 |
9% |
10% |
5-6% |
|
Other |
123 |
19% |
2% |
3-5% |
Adjusted operating profit of £65.6 million followed the Group’s sales performance, up 7% on a reported basis and flat on a LFL basis (H1 2024: £61.1 million), after adjusting for the £5.7 million impact from acquisitions, net of disposals, and adverse foreign exchange movements of £1.1 million. This resulted in an adjusted operating profit margin of 10.3%. We have broadly offset the direct impact of tariffs, and expect to continue to do so, while being mindful that much uncertainty still exists.
Adjusted earnings per share was 20% lower at 38.4 pence (H1 2024: 47.9 pence) due to a higher net finance charge following the acquisitions in 2024. Statutory operating profit of £24.8 million (H1 2024: £24.0 million) was 3% higher and equated to a 3.9% statutory operating margin (H1 2024: 4.1%).
Cash conversion was 126% on an adjusted basis in the first half (H1 2024: 111%), largely driven by a better net inflow in working capital, including higher payables and lower receivables. Further improvements in working capital management are expected in the second half, particularly around inventory reduction.
Strategic progress
We continue to make strong progress against our Strategy for Sustainable Growth.
In Spectris Scientific, Micromeritics and SciAps have been integrated into Malvern Panalytical to create the leading particle characterisation business for advanced material analysis. Cost synergies have already been realised and will step-up materially in the second half. Early discussions with customers have given us confidence with respect to the revenue synergy potential, with incremental new orders already being sold alongside our existing offerings, and with SciAps becoming our centre of excellence for handheld instruments, incorporating Malvern Panalytical’s existing handheld business. We are already seeing the benefits of their collaboration with Malvern Panalytical’s existing ASD hand-held product line, which is now expected to double its original 2025 sales forecast as a result of SciAps’ design and technology upgrades. SmartReturn is another product area benefiting from SciAps involvement.
In Spectris Dynamics, the benefits of combining Piezocryst’s expertise in high-precision, high-performance sensor development with HBK’s legacy of delivering precision measurement and insights are clear. HBK and Piezocryst are already working on the development of a groundbreaking high-temperature accelerometer, integrating Piezocryst crystals with Dytran cables and connectors, that will surpass the capabilities of any competitor. The two teams are also working closely to explore the compatibility of Piezocryst’s sensors with HBK’s new digiBOX, a compact IIoT multichannel amplifier that enables traditional sensors to become smart devices.
Investment in R&D remains a key priority for the Group, with £50.2 million invested in the first half (H1 2024: £52.9 million). Following a record year of new product launches in 2024, we continue to invest in innovation to drive future organic growth and market share gains.
We also continue to leverage the Spectris Business System (SBS) to drive operational excellence and deliver tangible cost savings. We have continued to develop and promote our ‘Go For Gold’ programme and were delighted that our HBK Suzhou site became our second Silver site after Malvern Panalytical’s Zhuhai site achieved the same status at the end of 2024. We also have 11 Bronze sites pursuing Silver and the majority of the remaining operational sites are expected to be certified Bronze by the end of 2025.
Capital allocation
Net debt at the end of June 2025 was £545.7 million, broadly unchanged compared to the end of 2024 (31 December 2024: £549.0 million). Leverage, as measured by net debt/EBITDA, was 2.3x. We expect the Group to return back within our 1-2x target leverage range by the end of 2025.
As outlined in the announcement of the KKR Acquisition dated 5 August 2025, KKR Bidco’s recommended offer for Spectris includes our interim dividend payment of 28.0 pence per share which has now been declared in the ordinary course. This represents a 5% increase on the 2024 interim dividend (H1 2024: 26.6 pence per share). The interim dividend will be payable on 7 November 2025 to shareholders on the register on 3 October 2025. The ex-dividend date is 2 October 2025.
Outlook
Supported by an improving sales outlook, along with the expected benefits from recent acquisitions and efficiency programs, we anticipate full year adjusted operating profit to be in line with management expectations.
Delivering Value Beyond Measure
Over the last seven years we have positioned Spectris for sustained success. Through astute portfolio management, disciplined execution of strategy, and unwavering investment in innovation and people, Spectris has become a more focused, higher quality and higher-performing company.
We have delivered strong returns to shareholders while building a business geared for long-term growth in exciting markets including clean energy, high-tech manufacturing, semi-con and healthcare. The company’s commitment to operational excellence and sustainability has improved margins and reduced risk, alongside enhancing our reputation and position with customers.
Our expectations for 2025 are supported by a healthy order backlog, improving order momentum, and with expected benefits from recent acquisitions and efficiency programs. Into the long-term, our confidence in the Group’s continued success stems from the continued strategic investments and strong execution track record, underpinned by fabulous people and a healthy, high-performance culture.
Having transformed ourselves since 2018, Spectris is in a strong position to harness the power of precision measurement in solving its customers’ toughest challenges, in the pursuit of making the world cleaner, healthier and more productive, while making Spectris a great place to work. We remain focused on delivering value beyond measure, for all our stakeholders.
Contacts:
Spectris plc
Andrew Heath, Chief Executive Officer
Angela Noon, Chief Financial Officer
Ryan Gregory, Acting Investor Relations Director
Teneo
Martin Robinson / Giles Kernick
+44 20 7353 4200
Analyst meeting and live webcast
A virtual presentation to analysts and investors will take place today at 08:00hrs BST, hosted by Andrew Heath, Chief Executive and Angela Noon, Chief Financial Officer to discuss this statement. The presentation will be broadcast live via the following link:
https://www.investis-live.com/spectris/68628b926c0d660016f95515/ndjh
Dial-In: +44 20 3936 2999 / +44 808 189 0158.
Access Code: 446455
Copies of this press release are available to the public from the registered office at 6th Floor, The Block, Space House, 12 Keeley Street, London, WC2B 4BA and on the Company’s website at www.spectris.com.
About Spectris
Spectris combines precision with purpose, delivering progress for a more sustainable world. We provide critical insights to our customers through premium precision measurement solutions combined with technical expertise and deep domain knowledge. Precision is at the heart of what we do - our leading, high-tech instruments and software equip our customers to solve some of their greatest challenges to make the world cleaner, healthier and more productive. We are focused on two key divisions – Spectris Scientific and Spectris Dynamics, which are placed in technology-driven end markets, with strong fundamentals and attractive growth trajectories. We have leading market positions in premium segments and employ 7,400 people located in more than 30 countries, all united behind our purpose to deliver value beyond measure for all our stakeholders. For more information, visit www.spectris.com.
Click here to read the full press release