Spirax's Challenging Start to Fiscal 2024 Is Largely Cyclical; Fundamentals Intact; Lower Our FVE

Spirax Group has managed to embed its products and highly qualified engineers, who act as its salesforce, into customers’ industrial and commercial processes. Approximately 50% of the group’s sales are from recurring maintenance, with an average invoice value of GBP 1,200, and a further 35% from small improvement projects with short payback periods. The recurring nature of Spirax's sales has allowed the group to enjoy greater resilience through the economic cycle compared with the more cyclical swings in customers’ capital-expenditure budgets, which are dependent on uncontrollable macroeconomic factors.