Spirax Group half-year results 2026: growth beats industrial markets as guidance holds

Spirax Group's first half at a glance

Spirax Group PLC has reported a resilient first half, with revenue and adjusted operating profit both growing ahead of the industrial markets it serves.

For the six months ended 30 June 2026, revenue increased by 5% to £863.8 million. Organic revenue growth was also 5%, meaning growth at constant currency and excluding acquisitions and disposals.

That compared with industrial production growth of 1.5% excluding China, an important benchmark because industrial activity influences demand across Spirax's businesses.

Adjusted operating profit rose by 8% to £171.1 million, while the adjusted operating margin improved from 19.3% to 19.8%. The company reiterated its full-year guidance for mid-single-digit organic revenue growth and organic margin progress.

Key figure	H1 2026	H1 2025	Change
Revenue	£863.8 million	£822.2 million	5%
Adjusted operating profit	£171.1 million	£158.8 million	8%
Adjusted operating margin	19.8%	19.3%	50 basis points
Adjusted profit before tax	£152.3 million	£139.9 million	9%
Adjusted basic EPS	150.0p	137.6p	9%
Interim dividend per share	50.4p	48.9p	3%
Adjusted cash conversion	54%	61%	Down 700 basis points

One basis point is one-hundredth of a percentage point.

Statutory profit growth needs some context

The statutory numbers were considerably stronger than the adjusted figures. Operating profit jumped 44% to £154.2 million, while statutory operating margin increased by 490 basis points to 17.9%.

Profit before tax rose 54% to £135.4 million and basic earnings per share increased by 56% to 132.2p.

Those are eye-catching gains, but investors should not treat them as the underlying growth rate of the business. Spirax said the increase largely reflected one-off restructuring costs recorded in the first half of 2025.

The adjusted figures therefore provide a cleaner view of current trading. On that basis, profit growth of 8% still exceeded revenue growth of 5%, helped by improved margins in two of the group's three businesses.

Electric Thermal Solutions leads growth

Spirax operates through three businesses, and their first-half performances were quite different.

Steam Thermal Solutions

Steam Thermal Solutions, or STS, remained the largest business, generating revenue of £419.8 million. Organic sales growth was 1%, despite demand growing at more than twice the rate of industrial production.

Some customer-specified shipments moved into the second half, while the decline in large project sales in China continued to moderate. Chinese sales fell by 1% organically, compared with a 6% decline in the first half of 2025.

Adjusted operating profit declined by 5% organically to £92.3 million. The adjusted margin fell by 170 basis points organically to 22.0%, reflecting shipment timing and investment in sales and technical capabilities.

Management expects second-half sales growth to exceed the first-half rate. Higher shipments and operating leverage are expected to lift the margin, leaving the full-year STS margin broadly in line with 2025.

Electric Thermal Solutions

Electric Thermal Solutions, or ETS, was the standout growth engine. Revenue rose to £232.9 million, representing organic growth of 11%.

All three ETS divisions delivered strong demand growth. Process Heating benefited from an expanding order book, Equipment Heating gained from double-digit semiconductor demand, and Heat Trace continued to benefit from dedicated sales teams focused on priority sectors and regions.

Adjusted operating profit increased by 26% organically to £40.0 million. Its adjusted margin improved by 220 basis points to 17.2%, supported by operating leverage, a more favourable sales mix and the absence of lower-margin legacy orders.

These benefits were partly offset by ramp-up costs at the new Medium Voltage facility in Ogden.

Watson-Marlow Fluid Technology Solutions

Watson-Marlow Fluid Technology Solutions, or WMFTS, delivered revenue of £211.1 million, up 7% organically.

Biopharmaceutical order intake remained ahead of sales. Second-quarter orders reached their highest level since the COVID-related peak in 2021 and were above pre-COVID levels.

The Process Industries operation also continued to gain market share in sectors including mining and wastewater.

Adjusted operating profit rose by 15% organically to £58.0 million, while the adjusted margin increased by 80 basis points to 27.5%. That remains the highest margin among Spirax's three operating businesses.

Cash conversion is the main weak point

The most obvious softer area was cash generation.

Adjusted cash conversion fell from 61% to 54%, while adjusted cash from operations declined by 6% to £91.6 million. Statutory net cash from operating activities dropped by 14% to £84.3 million.

Management attributed the weaker conversion to normal first-half seasonality and planned inventory builds. It expects full-year cash conversion to be similar to the 2025 level.

Net debt nevertheless declined by 6% to £618.2 million, while leverage improved from 1.8 times to 1.6 times earnings before interest, tax, depreciation and amortisation.

That combination makes the cash result less alarming, but second-half conversion remains an important area to monitor. The planned inventory build needs to translate into shipments, revenue and cash as expected.

Dividend rises by 3%

The board declared an interim dividend of 50.4p per share, up 3% from 48.9p.

It will be paid on 13 November 2026 to shareholders on the register at the close of business on 16 October 2026.

The increase is below adjusted earnings per share growth of 9%, although the announcement did not disclose an interim dividend cover target.

Full-year guidance remains intact

Spirax continues to expect mid-single-digit organic revenue growth for 2026, well ahead of forecast industrial production growth of 1.9%.

The group also expects its adjusted operating margin to increase organically from the 20.0% achieved in 2025. Adjusted operating profit and earnings per share are expected to grow faster than organic revenue.

For the second half, management expects:

• STS sales growth ahead of the first half, with a higher margin
• ETS high-single-digit sales growth, with margin slightly ahead of the first half
• WMFTS high-single-digit sales growth, with margin broadly similar to the first half
• Higher corporate costs due to investment in areas including Digital and Services
• Net financing costs, the effective tax rate and cash conversion broadly similar to 2025

Exchange rates prevailing at the end of July would have a negligible effect on 2025 comparative revenue and adjusted operating profit.

What investors should watch next

The positive investment case from these results rests on Spirax growing faster than subdued industrial markets while protecting its high group margin.

ETS and WMFTS delivered strong revenue growth and meaningful margin expansion. Healthy semiconductor demand, improving biopharmaceutical orders and solid order books also provide support for management's second-half expectations.

The main pressure point is STS. Its margin declined as investment and shipment timing outweighed modest sales growth, so delivery against the stronger second-half forecast will matter. Cash conversion must also recover as planned inventories move through the business.

Overall, this was an in-line half rather than a major change in direction. Spirax produced 5% organic revenue growth, improved its group adjusted margin and maintained guidance despite a challenging macroeconomic backdrop. The second half now needs to confirm that the STS order book and inventory investment can turn into the expected profit and cash growth.

The full figures and accompanying statements are available in the original company announcement.