Spirax-Sarco Engineering

Spirax-Sarco Engineering Dividend Analysis and Summary

• Final dividend: 121.1 pence per share
• Total 2025 dividend: 170.0 pence per share (vs 165.0p in 2024; +3%)
• Interim dividend already paid: 48.9 pence per share
• Record date: 24/04/2026
• Ex-dividend date: 23/04/2026 (derived as one business day before the record date)
• Payment date: 22/05/2026
• Dividend cover (FY2025):
  • On adjusted EPS (296.3p): 1.74x (payout ~57%)
  • On statutory EPS (221.7p): 1.30x (payout ~77%)
• Cash support: Cash dividends paid in the year £122.8m vs adjusted cash from operations £301.5m (~2.5x before capex)
• Balance sheet/leverage: Net debt £564.7m; leverage 1.5x (down from 1.6x)

• Sustainability: The dividend is well supported by strong adjusted earnings and cash generation (89% adjusted cash conversion) and a moderate leverage position (1.5x). The completion of the restructuring with £40m annualised savings should underpin cash flows.
• Coverage: Adjusted cover of 1.74x is comfortable for a quality industrial; statutory cover is tighter at 1.30x due to one-off restructuring costs, which are now largely behind the Group.
• Growth trajectory: The +3% DPS increase aligns with management’s guidance for continued organic growth and margin progress. Adjusted EPS rose 3%, supporting a modestly progressive dividend while preserving reinvestment capacity.
• Capital allocation: Management emphasises disciplined allocation, using restructuring savings to fund organic growth (sales capability, digital tools, NPD, decarbonisation). No buybacks disclosed; policy execution appears to prioritise investment plus a steady, progressive dividend.