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Gloucestershire Business News

Record profits and sales of more than £590 million

A major Gloucestershire employer has revealed record sales and profits, but warned more difficult times could be ahead.

Cheltenham-headquartered Spirax Sarco, which employs an estimated 1,000 staff in the county and 7,900 world-wide, said its financial performance during the six months to June 30 had been "strong".

But it warned that a weakening in the global economy could well make the second half of its year more taxing, bringing the end result back in line with original expectations.

Sales grew in the first half of the year for the steam engineering expert by eight per cent to £591.2 million (2018: £547.6 million) and adjusted operating profit stood at £129.2m, up three per cent from £125.7m.

"During the first half of 2019, global industrial production growth remained positive at 1.6 per cent, compared with 3.5 per cent in the first half of 2018," said the firm's half year report.

"In the first six months of 2019, industrial production growth in Europe and Asia Pacific (excluding China) was flat and Latin America saw a contraction, compared with the same period in the prior year.

"China's industrial production growth rate was 5.8 per cent, raising Asia Pacific's growth rate as a whole to 3 per cent. North America maintained positive growth, although at almost half the level of the prior year and with a slowing growth rate in the second quarter.

"The latest forecast for global industrial production growth for the whole of 2019 is 1.6 per cent, approximately half the 3.1 per cent achieved in 2018.

"Our markets remain strongly influenced by industrial production growth rates. Our operating assumption for the remainder of the year is for relatively stable levels of global industrial production growth albeit at significantly reduced rates than experienced in 2018 and below previous estimates.

"While the strong performance in the first half of this year was ahead of our expectations, we believe that second half trading conditions will be below our earlier estimates. Therefore, overall, our full year expectations remain unchanged."

In May the firm also completed the acquisition of electrical thermal solutions specialist Thermocoax for £135 million.

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