Case study: Spectris

Résumé du document

Spectris is a leading supplier of precision instrumentation and controls. It employs 6,000 employees in its 14 business units.
It has a wide range of core technology and their products help customers improve product quality and performance, improve core manufacturing processes, and reduce downtime and wastage time to market.

The Spectris group provides test and measurement equipment to the automotive and aerospace industries which have seen growth as new development programmes come on stream.

Spectris solutions and services are increasingly being applied to help our customers use energy and resources more efficiently.
The company is listed on the London Stock Exchange (symbol - SXS) and technology companies.

Spectris is organized in three main activities:
- Process Technology
- Inline Instrumentation
- Electronic Controls

The Spectris strategy focuses on the delivering sustainable growth in attractive markets via a portfolio of core businesses with market-leading products which add value for our customers. A key element of their strategy is to increase the scale and enhance the growth potential of this portfolio.

Extraits

[...] As a result the investors had bigger returns on their investments, what confirms the good health of Spectris' growth and the good allocation of the resources and the funds available, to get more returns. Asset Utilization Ratio: Sales / Operating Assets Measures the number of sales pound earned for each pound invested in assets. Measures the speed at which a business is able to turn assets into sales, and hence cash. It consists in the relationship between sales and assets. The Asset Utilization Ratio had a slight increase from 1.5158 to 1.5413 meaning that the company managed to turn faster its assets into sales. [...]

[...] Return On Sales : Operating Profit / Sales Used to detect a company's operational efficiency. ROS is also known as a firm's "operating profit margin". ROS is useful to understand how much profit is being produced per pound of sales. Between 2005 and 2006, we can observe that the ROS increased from 0.0989 to 0.1208 that means that for each pound of sales, the return was 2.19 points bigger. So we can say that the margin results bigger because of a more important Operating profit. [...]

[...] That means that Spectris did not give a proportional dividend, compared to the earnings per share they realized. The company did not give to the shareholders as much as in 2005 and may have kept these benefits for, maybe, reserves or investments. Dividend Cover: Earnings Per Share / Dividend Per Share Dividend cover is a measure of the ability of a company to maintain the level of dividend paid out. The higher the cover, the better the ability to maintain dividends if profits drop. [...]

[...] (We will see further explanation in the Dividend Per Share) Dividend per Share: Dividend Paid / Number Of Share Issued It is the amount of the dividend that shareholders have, or will, receive, over a year, for each share they own. Dividends are paid to holders of shares on the "record date" which will be announced beforehand by the company. Companies may pay interim dividends during the year as well as a final dividend. The Dividend Paid Per Share rose by 1.46 p between 2005 and 2006. [...]

[...] Spectris Creditors Turnover ratio decreased for 13 days, that means that the company became more efficient in 2006 in the payment of their creditors. It should be due to a bigger Operating Profit and the good management of resources in order to avoid delays. The company seams to be less in a shortage of cash compared to the previous year. However, a high turnover of credit payments indicates a relatively short time between purchase and payment settlement, which may mean, if they are allowed to take more time to pay, that they are not taking full advantage of their credit periods. [...]