Shares in engineering group Spirax (LON:SPX) were down in early trading despite H1 results beating forecasts. Seemingly, investors decided to book profits after the stock’s strong run over the past month.
H1 results beat forecasts
For the six months to June, Spirax reported revenue of £864 million, beating the consensus forecast of £849 million. Growth of 5% was well ahead of the 1.5% increase in global industrial production ex-China.
Electric Thermal Solutions registered growth of 11%, while Watson Marlow Fuild Technology Solutions registered growth of 7%. Within Fluid Technology, the pharmaceutical and biotech industries saw orders grow ahead of sales.
Steam Thermal Solutions registered growth of 1%, with demand growth of more than 3% and ‘strong momentum into H2’. Margins were lower due to the phasing of shipments and investments in growth.
| H1 2026 | Est H1 2026 | Est FY 2026 | |
| Revenue | £864m | £849m | £1,760m |
| Adj Operating Profit | ££171m | £167m | £360m |
| Adjusted EPS | 150p | 317p |
Resilient organic growth
Adjusted operating profit of £171 million also beat the consensus, which was pitched at £167 million. Group margins were up strongly due to the non-recurrence of 2025’s restructuring charges.
Return on capital employed was higher, and the company confirmed its FY revenue and margin targets. ‘We have again delivered resilient mid-single-digit organic growth in revenue and profit, well ahead of industrial production’, said CEO Nimesh Patel.
‘Driving growth ahead of our markets, in spite of external conditions, is now becoming embedded in how we operate. Continuing momentum in end markets such as Semicon and Biopharm, as well as strong orderbooks, underpin our expectations for second half revenue and profit growth’, added Patel.
A beat is usually good enough to see a company’s shares go up, but not today. Looking around, a few stocks which met or beat expectations have seen their shares trade lower.
In the case of Spirax, expectations were probably for a bigger beat given the sharp run-up in the stock during July. Also, investors who were hoping the company would upgrade its FY and medium-term forecasts will be disappointed.
As we said in our preview, Spirax is a quality company with high margins and return on capital and it’s priced accordingly. The valuation today sits around the middle of its historic average range, so to push on it will need upgrades. We sense the company is playing it safe at this stage, so we’ll see what the Q4 update brings.
