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Spectris shares jump as chief executive steps down and sales rise

Spectris posted a 2% increase in like-for-like sales in the four months to April 30, including the impact of foreign exchange headwinds
Sales to pharmaceutical and automotive industries were the strongest in the period

Spectris plc (LON:SXS) said chief executive John O’Higgins plans to retire next year as it reported sales growth in the first four months of the year.

O'Higgins will remain as chief executive until the FTSE 250-listed instrument and controls supplier finds a replacement.

"I have thoroughly enjoyed being part of Spectris' success story and am pleased that the group is well placed to deliver on its growth strategy,” O'Higgins said in a statement.

"I will leave behind a team of highly experienced people to continue to take Spectris forward and realise its strategic ambitions."

Sales rise despite foreign exchange headwinds 

In a separate announcement, the company posted a 2% increase in like-for-like sales in the four months to April 30, including the impact of foreign exchange headwinds.

At constant exchange rates, like-for-like sales rose 6%, driven by growth in China and in the UK on the back of strong demand for Millbrook's test services.

Spectris said all market segments delivered like-for-like sales growth apart for in-line instrumentation, which declined against a robust year-ago period.

Sales to the pharmaceutical and automotive industries were the strongest in terms of market segments.

"Performance in the year to date shows a continuation of the strength in our end markets experienced in 2017, partly offset by adverse foreign currency exchange impact,” O’Higgins said.

"Performance remains consistent with our expectations for the full year, although noting that visibility on our order book remains limited.”

Spectris expands through acquisitions 

The group ended the period with net debt of £217mln, an increase of £167mln, mainly due to the acquisition of Concept Life Sciences in January, capital expenditure and spending on its £100mln share buyback programme.  

READ: Spectris shares jump following strong 2017 performance announcement of share buyback

“The acquisition of Concept Life Sciences in the period was a key step forward in this strategy, adding services to our Materials Analysis segment where it has strong synergies with Malvern Panalytical,” the company said.

READ: Spectris buys Concept Life Sciences for £163mln

In April the company also completed the acquisition of US automotive test system and service provider Revolutionary Engineering Inc. for US$19mln to complement its  Millbrook business and extend its reach into new markets.

READ: Spectris acquires US automotive testing firm Revolutionary Engineering for US$19mln

Spectris also revealed in April that its test and management businesses, Brüel & Kjær Sound & Vibration ('BKSV') and HBM, will be merging activities from 1 January 2019 resulting in some one-off costs in 2018.

The disposal of its environmental monitoring business,  EMS Brüel & Kjær, into a joint venture with Macquarie Capital is expected to completed at the end of May for £43mln in cash. 

In early morning trading, shares rose 1.8% to 2,843p. 

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