Spirax Group reported that both organic revenue growth and adjusted operating margins for the 10 months ended 31 October were ahead of the levels achieved in the first half, despite ongoing weakness in global industrial production and softer demand for large projects.
The FTSE 100 company reiterated its full-year outlook, saying it continued to expect organic revenue growth in line with 2024 and mid-single-digit organic growth in adjusted operating profit.
Global industrial production excluding China rose 1.6% in the first nine months of the year, with full-year expectations now revised down to the same level.
Spirax said third-quarter industrial output was weaker than in the first half, particularly in the United States, Germany, France, Italy and the UK, while uncertainty around tariffs continued to weigh on business confidence and large-project demand.
In Steam Thermal Solutions, sales in the four months to October were broadly flat on an organic basis as large project activity remained constrained by the macro backdrop.
Excluding large project sales in China and Korea, however, the division posted growth over the prior year.
The company said the rate of sales decline in China was moderating, helped by continuing double-digit growth in maintenance, repair and overhaul activity, while Korea was seeing a recovery in orders and sales, with both expected to grow in the second half.
Electric Thermal Solutions sustained the strong organic sales growth seen in the first half.
Process Heating continued to benefit from operational improvements that are accelerating shipments from the order book, including remaining legacy orders, while Equipment Heating recorded further growth due to strong demand for semiconductor equipment solutions.
The Watson-Marlow division delivered strong overall organic sales growth, supported by double-digit order growth in Biopharm that has continued into the second half and driven an acceleration in sales.
Process Industries also generated robust growth, exceeding the pace achieved in the first half.
Spirax said it remained on track to achieve around £35m in annualised savings from its restructuring programme, most of which are being reinvested into growth initiatives.
Associated costs remain in line with expectations and are largely expected to fall in 2025.
The group's financial position improved over the period, with net borrowings excluding leases declining to £596m at the end of October from £658m at the end of June.
Its net-debt-to-EBITDA ratio fell to 1.6 times from 1.8 times.
Spirax reaffirmed its full-year guidance, maintaining its expectation for organic revenue growth consistent with 2024 and ahead of global industrial production, and forecasting an adjusted operating profit margin above the currency-adjusted 2024 level.
At 0913 GMT, shares in Spirax Group were up 3.43% at 7,327.92p.
Reporting by Josh White for Sharecast.com.