Spectris buoyed by US and China demand Strong demand from China and North America helped Spectris, the maker of precision instruments and industrial controls, lift profits 38 per cent in 2011. The company, whose products have uses ranging from testing vehicle designs to monitoring noise levels around construction sites, said turnover grew 23 per cent to £1.1bn. Pre-tax profits were £166m, up from £119.9m in 2010. Operating margins rose from 14.2 to 15.9 per cent. John O'Higgins, chief executive, said: "I wouldn't put our success down to any one thing, or just to last year. For a number of years, we have been committed to investing in R&D, and to investing in our sales and marketing channels globally. As the world economy has recovered, we have benefited. Spectris said that 15 per cent of sales growth was organic, with acquisitions - notably the $475m purchase of former rival Omega Engineering - accounting for the bulk of the remainder. Spectris's outlay on acquisitions left net debt at £356m, or about 1.6 times earnings before interest, tax, depreciation and amortisation. However, analysts expect the ratio to fall to 1 by the end of 2012, and Clive Watson, finance director, said that the company still had scope for bolt-on acquisitions. Trading was strong across the globe, with like-for-like sales up 17 per cent in Asia-Pacific, 14 per cent in North America and 13 per cent in Europe. China was the best performing market, with sales growing 27 per cent. Dominic Convey, an analyst at Peel Hunt, said that Spectris was profiting from a wave of factory automation in China, as companies responded to rapid wage inflation. "That is a trend it should be able to profit from for some time yet," he added. Spectris said that between two-fifths and a half of last year's growth was attributable to a bounceback from the global recession, but that it was "strategically well-positioned" for the coming year. Scott Cagehin, of Numis, said: "Spectris benefits from companies wanting to boost efficiency, or monitor and analyse performance, and both those trends are likely to remain intact." A final dividend of 25.4 pence a share, brings the full-year pay-out to 33.6p, up 20 per cent on 2010. Shares in the FTSE 350-listed company were up 2.5 per cent, at £17.02 on Friday afternoon. Even allowing for bounceback growth, 2011 was clearly a strong year for Spectris, and at Friday's close, the company was trading at 12 times prospective earnings - a premium to the sectoral average of 11.5 times. However, that is still below Spectris" long-run average of 13 times, and with scope to profit from selling Omega's products beyond North America, Spectris looks fairly valued.