Interim Results

Spectris PLC
10 September 2001



Date:              Embargoed until 7.00am, Monday 10 September 2001

Contact:           Hans Nilsson, Chief Executive   Tel: [phone](am)
                   Spectris plc                    Tel: [phone]

                   Richard Mountain
                   Financial Dynamics              Tel: [phone] (am)



                                      SPECTRIS plc


                                 2001 INTERIM RESULTS



Spectris plc, the precision instrumentation and controls company, announces
its interim results for the six months to 30 June 2001.




£m                           H1 2001         H1 2000             Change

Sales                         276.9           164.2               + 69%
Operating Profit*              31.2            20.7               + 51%
Profit before Tax*             25.2            18.3               + 38%
Normalised e.p.s.*             16.1p           13.2p              + 22%
Dividend                        3.75p           3.55p             +  6%


*before exceptional items and goodwill amortisation


Highlights include:


*        Sales, profits and e.p.s. substantially up on first half 2000

*        Like for like sales up 7%

*        Gross margins maintained

*        Broad spread of markets provides downside protection

*        Integration of Spectris AG acquisition progressing well



Commenting on the results, Hans Nilsson, Chief Executive said:


'First half e.p.s. growth of 22% reflects a strong performance in tough market
conditions. Our broad spread of customers and products combined with wide
geographical coverage have served us well and will continue to be important
given an uncertain macro economic outlook.'




CHAIRMAN'S STATEMENT



Overview



Sales, profits and earnings per share increased substantially compared with
the equivalent prior year period. The results benefited from an
earnings-enhancing contribution from Spectris AG acquired in mid 2000.   In
the context of the US economic slowdown, the wide spread of markets served
enabled the continuing businesses to perform creditably, if unevenly, to
produce a robust performance and an increase in profits.



Results



Sales increased by 69%.   The acquired businesses generated sales of £113.7m.
On a like for like basis the continuing businesses, excluding Filtration
Systems, generated sales growth of 7%.   Currency effects were helpful but
small.  Gross margins were maintained.



Operating profit before exceptional items and goodwill amortisation increased
by 51% although underlying organic profit growth of 2% was essentially a
function of the different fortunes of businesses exposed to the
telecommunications and semiconductor collapse on the one hand and units
exposed to the wider international economy on the other.  Geographically,
sales were weaker in the US with better performances from other territories.



Capital expenditure amounted to £16m, of which £9m was due to non-recurring
items inherited with the Spectris AG acquisition.  Adjusting for these items,
conversion of operating profit to operating cash was 54%.  This was comparable
with the first half of the previous year and we expect the historical pattern
of improved cash generation to repeat itself at the year end.  In the second
half, capital expenditure, excluding the non-recurring items referred to
above, is likely to return to past levels and to be close to depreciation.



The working capital to sales ratio improved slightly compared with the prior
year end, but  there  are opportunities to improve performance, particularly
in some of the new companies.



Net borrowings at the half year were £140m compared with £153.5m at year end.
Disposals raised £42.8m and acquisitions consumed £3m.



The Board intends to pay an interim dividend of 3.75p, a 6% increase on the
previous year.    The dividend will be paid on 16 November 2001 to
shareholders on the register at 19 October 2001.



Operating Review



Electronic Controls

As foreshadowed at the AGM, the electronic controls segment, with significant
exposure to the telecommunications equipment and electronics industries,
experienced a contraction in sales.  This, allied with margin pressures and
measures to reduce costs, saw a near halving of operating profits.  Although
an early improvement in demand appears unlikely, the position has not further
deteriorated.



Process Instrumentation

Process instrumentation performed well with sales and profit growth of nearly
14% and 19% respectively compared with the equivalent period of the prior
year.  However there was considerable variation in the performance of the
individual units.  The two businesses dependent upon the semiconductor
industry - Luxtron and Particle Measuring Systems - broke even in the period.
Profit recovery will, in the short term, depend more on the benefits of cost
reduction measures, which have already been implemented, than on improved
demand.



A good performance was achieved at Fusion UV Systems, where the positive
developments are expected to continue, albeit attenuated by the likely near
term reduction of orders from the optical fibre industry.  Servomex benefited
from improved demand as confidence returned to the oil and gas industry after
the consolidation of recent years and from the advantage of improved prices
for oil and petrochemicals.  The actions taken since acquisition to revamp the
product portfolio and streamline operating processes are beginning to deliver
better  results.



Elsewhere in our instrumentation businesses the diversity of markets served
and the inherent strength in providing products which deliver productivity
benefits to customers proved their worth and produced a flat, but creditable,
result.



Spectris AG

The Spectris AG units enjoyed strong order intake.  There were particularly
encouraging results at BTG, and at HBM where the manufacturing activities in
China are being expanded.  The companies collectively delivered an operating
profit contribution of £11.4m on £113.7m of sales.  The Bruel & Kjaer, Schenck
Condition Monitoring Systems unit made major progress following
rationalisation of two previously separate activities.  The larger Bruel &
Kjaer Sound & Vibration business has taken longer to integrate, but the
elimination of the sales matrix under which the businesses previously
operated, is close to completion.   Given the seasonality referred to in
earlier reports, the progress towards operating margins in the mid-teens is,
subject to reasonable continuity of demand, on track.



Filtration Systems

Disposals of our filtration businesses proceeded according to plan, with a
total realisation of £30.5m in the period. One business remains to be sold and
the process is well advanced.   The nuclear fuel canister business will be
closed on the completion of customer commitments shortly after the year end.
The closure will not impact profitability.



The Board



Shareholders will be aware that I succeeded Sir Robin Biggam as non-executive
Chairman after the AGM in May.  Ron Williams retired in August after
completing six years as a non-executive director and Chairman of the Audit
Committee.  To both of them I offer my personal thanks, as well as those of
the Board, for their help and support over six eventful years, during which
the company progressed decisively towards its goal of making the transition
from a mechanical engineering group to the strategically focused
instrumentation and controls business that it is today.  Their contributions
have been invaluable.



Andrew Given, appointed to the Board in June, has replaced Ron Williams as
Chairman of the Audit Committee.  He is Finance Director of Logica plc and has
much experience in technology- based industry in the UK and North America.



Hans Nilsson succeeded me as Chief Executive and, following that move, James
Otter was appointed to the Board in June as a Business Group Director and a
member of the executive team.  A natural sciences graduate and MBA, he has
experience of managing businesses in chemicals and instrumentation in several
European countries.



I welcome both new members to the Board.



Outlook



The overall economic situation will be the main ingredient in shaping the
second half results.  The first quarter slow-down in activity in the
technology and electronic sectors has continued and has negatively influenced
investment in US industry generally. Although North American orders in recent
months have been dull, they appear to be stable whereas the position elsewhere
is more uncertain.  Spectris, with short lead times and order books, is no
stranger to managing in circumstances of poor visibility of demand, and
operationally, management is focused on cost containment and the realisation
of further benefits from the Spectris AG acquisition.



Taking all these factors into account, the Board's current view is that the
company will deliver an improved performance for the year as a whole.





                                   - ENDS -

A table of results is attached.

Copies of this notice are available to the public from the registered office:

Station Road, Egham, Surrey TW20 9NP and on the company's website at

www.spectris.com


Group Results
For the half year to 30 June 2001
                                                       2001     2000     2000
                                            Notes      Half     Half     Full
                                                       year     year     year
                                                      £'000    £'000    £'000
Turnover

Existing businesses                                 267,930  158,332  458,086
Operations disposed                                   8,922    5,899    5,899
                                                     ______   ______  _______
Continuing operations                         2     276,852  164,231  463,985
                                                     ______   ______  _______
Operating profit before goodwill
amortisation
and exceptional items

Existing businesses                                  29,931   19,968   57,961
Operations disposed                                   1,277      686      686
                                                     ______  _______   ______
Continuing operations                         2      31,208   20,654   58,647

Goodwill amortisation                               (2,948)    (513)  (3,289)
Operating exceptional items                   3     (1,915)    1,888  (4,296)

                                                     ______  _______  _______

Operating profit                                     26,345   22,029   51,062

Profit/(loss) on sale of businesses           4      20,712  (2,802)  (2,256)

                                                     ______  _______  _______

Profit before interest and taxation                  47,057   19,227   48,806
Net interest payable                                (6,051)  (2,368)  (7,630)

                                                     ______  _______  _______

Profit before taxation                               41,006   16,859   41,176
Taxation on operating profit                  5     (7,547)  (5,230) (15,021)
Exceptional taxation (charge)/credit          5     (3,810)    (566)    1,162

                                                     ______  _______  _______

Profit after taxation                                29,649   11,063   27,317

Dividends                                           (4,103)  (3,903) (12,832)

                                                     ______  _______  _______

Retained profit                                      25,546    7,160   14,485

                                                     ______  _______  _______

Average number of shares in issue                     109.5     98.8    103.9
(millions)
Earnings per ordinary share                           27.1p    11.2p    26.3p
Fully diluted earnings per share                      26.8p    11.1p    26.1p
Normalised earnings per share                         16.1p    13.2p    34.6p
Dividends per ordinary share                          3.75p    3.55p    11.7p


Balance Sheet Summary


                                             2001           2000           2000
                                          30 June         1 July    31 December
                                            £'000          £'000          £'000

Intangible assets                         109,669         19,775        104,700
Fixed assets                               80,948         33,736         77,122
Fixed asset investments                    11,463          6,474          9,451
Current asset investments                       -              -         12,061
Working capital                           102,278         65,847        101,160
Tax payable                              (21,987)       (12,064)       (19,167)
Dividends payable                         (4,103)        (3,917)        (8,949)
Provisions                                (5,059)        (3,095)       (11,348)

                                          273,209       106,756        265,030
Net borrowing                            (139,894)       (8,453)      (153,528)
Net assets                                133,315         98,303       111,502

Share capital                               5,585          5,582          5,584
Reserves                                  127,730         92,721        105,918

Equity shareholders' funds                133,315         98,303        111,502

Reconciliation of movements in shareholders'
funds
Retained profit                            25,546          7,160         14,485
Foreign exchange adjustments               (3,855)           (31)         5,631
New share capital subscribed                  122         55,586         55,794
Goodwill realised                               -          9,546          9,550

Net increase                               21,813         72,261         85,460
Opening shareholders' funds               111,502         26,042         26,042

Closing shareholders' funds               133,315         98,303        111,502



Cash Flow Summary



                                              2001          2000          2000
                                         Half year     Half year     Full year
                                             £'000         £'000         £'000

Cash inflow from operating                  15,774        13,329        53,894
activities
Net capital expenditure                   (13,099)       (2,350)       (5,849)
Net interest paid                          (6,051)       (2,301)       (6,821)
Tax paid                                   (8,597)       (5,631)      (10,843)


Free cash flow                            (11,973)         3,047        30,381
Dividends paid                             (8,948)       (7,205)      (11,102)
Share issues                                   122        55,586        55,794
Purchase of fixed asset investments        (2,442)         (900)       (3,300)
Cash generated by company held for               0             0         3,788
resale
Purchase of subsidiaries                   (2,958)       (1,485)     (169,521)
Sale of subsidiaries                        42,811         9,592        12,275
Exchange adjustment                        (2,978)       (2,773)       (7,528)

Movement in net debt in the period          13,634        55,862      (89,213)

Net debt at the beginning of the         (153,528)      (64,315)      (64,315)
period

Net debt at the end of the period        (139,894)       (8,453)     (153,528)


Reconciliation of operating profit to cash inflow from operating activities


Operating profit                           26,345         22,029         51,062
Depreciation                                6,696          3,574         10,967
Goodwill amortisation                       2,948            513          3,289
Increase in working capital              (14,800)       (12,787)       (11,558)
(Utilisation)/increase in                 (5,415)              0            134
provisions
                                           15,774         13,329         53,894





Notes to the Accounts

1.                   Principal accounting policies and basis of preparation

The interim report has been prepared on the basis of the accounting policies
set out in the Group's 2000 statutory accounts and approved by the Board on 10
September 2001.  This report does not constitute statutory accounts for the
company.  The interim figures for 30 June 2001 and 1 July 2000 are unaudited.
The results for 2000 are not the statutory accounts but an abridged version of
the full accounts which have received an unqualified report by the auditors
and have been filed with the Registrar of Companies.

2.                   Business sector analysis


                                         2001            2000            2000
                                    Half year       Half year       Full year
                                        £'000           £'000           £'000
Turnover

Electronic Controls                    24,526          27,479          56,261
Process Instrumentation               123,239         112,641         237,469
Spectris AG                           113,691               -         129,444

Filtration Systems                      6,474          18,212          34,912

Existing businesses                   267,930         158,332         458,086
Operations disposed                     8,922           5,899           5,899

Total continuing operations           276,852         164,231         463,985


Operating profit

Electronic Controls                     2,599           4,498           8,710
Process Instrumentation                14,653          12,482          29,770
Spectris AG                            11,424               -          13,706

Filtration Systems                      1,255           2,988           5,775

Existing businesses                    29,931          19,968          57,961
Operations disposed                     1,277             686             686

Total continuing operations            31,208          20,654          58,647

Goodwill amortisation                 (2,948)           (513)         (3,289)
Operating exceptional items           (1,915)           1,888         (4,296)

Operating profit                       26,345          22,029          51,062



3.                   Operating exceptional items

The operating exceptional items comprise redundancy and restructuring costs
incurred by the Spectris AG businesses acquired in 2000.

4.                   Profit on disposal of businesses

A surplus to net assets of £20.7m was generated following the disposal of
three businesses:  the Arlon group of companies, Fairey Microfiltrex and
Fusion Aetek.  There is no goodwill associated with any of these businesses.

5.                   Tax on profit on ordinary activities

The taxation charge for the six months to 30 June 2001 is based on an estimate
of the effective rate of taxation for the current year (excluding exceptional
items and goodwill amortisation) of 30%.  The effective rate of tax for the
year to 31 December 2000 was 29.4%.

The tax charge/(credit) is analysed as follows:
                                                               2001        2000

                                                              £'000       £'000
UK                                                              750         199
Overseas                                                      6,797       5,031
                                                              7,547       5,230
Tax (credit)/charge on operating exceptional items            (252)         566
Tax charge on sale of businesses                              4,062           0
                                                             11,357       5,796

6.                  Earnings per share
                                                     Earnings    Earnings per
                                                                        share
                                               2001      2000    2001    2000
                                               Half      Half    Half    Half
                                               year      year    year    year
                                              £'000     £'000   pence   pence

Basic earnings and earnings per share        29,649    11,063    27.1    11.2
Basic earnings and earnings per share 
attributable to:
Operating exceptional items                   1,915   (1,888)     1.7   (1.9)
Goodwill amortisation                         2,948       513     2.7     0.5
Profit on sale of businesses               (20,712)     2,802  (18.9)     2.8
Tax (credit)/charge on operating              (252)       566   (0.2)     0.6
exceptional items
Tax charge on profit on sale of businesses    4,062         0     3.7       0
                                                            
Normalised earnings and earnings per share   17,610    13,056    16.1    13.2

The weighted average number of 5p ordinary shares in issue during the period
was 109.5 million (2000: 98.8 million), after adjusting for the effects of the
rights issue in 2000.

Normalised earnings per share is presented to show the underlying performance
of the Group more clearly.

The calculation of diluted earnings per share is based on the group profit of
£29,649,000 and on the diluted weighted average number of shares in issue
during the period of 110.8 million.

7.                   Interim report

Copies of the interim report, which will be posted to shareholders in the week
commencing 10 September, may be obtained from the registered office at Station 
Road, Egham, Surrey TW20 9NP.