Spirax-Sarco Continues To Deliver Robust Growth and Maintains Full-Year Operating Guidance

Wide-moat Spirax-Sarco continues to progress in line with our expectations following its third-quarter trading update, which was thin on quantitative details, but which can be viewed as marginally positive overall. Performance remains robust across all three operating segments, despite global economic forecasts deteriorating. Sales have been progressing better than anticipated during the group’s half-year release, but second-half margins are likely to be weaker than the 23.8% achieved during first-half 2022. Nevertheless, full-year operating margin was maintained. The group has also been active on the acquisition front during the last quarter, announcing two deals, which will be accretive to current-year revenue and EBIT by approximately GBP 25 million and GBP 5 million, respectively. While we plan to adjust our estimates to incorporate the acquisitions, we don’t expect to change our GBX 11,800 fair value estimate. Shares are currently fair valued.