August 7, 2019 / 7:39 AM / 2 months ago

Spirax-Sarco says sales growth at main business to halve

(Reuters) - Spirax-Sarco Engineering Plc (SPX.L) expects sales growth at its main business to more than halve in the second half of this year, as a weakening global economy weighs on forecasts for industrial production, the company said on Wednesday.

Shares of the company fell about 5% to 81.80 pounds in early trading as Spirax’s downbeat forecast overshadowed a better-than-expected first-half.

The valve maker said sales would drop at its steam specialties business partly due to the “non-repeat nature” of some of its sources of growth in the first half, which included several large orders in China and Korea, a Brexit stock build and a stronger-than-expected currency devaluation in Argentina.

The unit accounted for 62% of the company’s revenue in the first half of the year.

The company also said second-half trading conditions will be below its earlier estimates.

The latest 2019 forecast for global industrial production growth is at 1.6%, compared with the 3.1% growth posted in 2018, Spirax said.

Overall, revenue in the first half of the year rose 8% and adjusted pretax profit was up 3%, the company said.

Reporting by Justin George Varghese in Bengaluru; editing by Patrick Graham; Editing by Anil D'Silva

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