SPIRAX GROUP (SPX) SHARES OUTLOOK FOR 2025 AND 2026

How did Spirax Group (SPX) shares perform in 2025?

Spirax Group plc (LSE: SPX), a global engineering leader in steam and fluid control technologies, demonstrated a resilient yet measured performance throughout 2025. Trading on the London Stock Exchange, shares in SPX reflected the company’s cautious optimism amidst broader industrial challenges and global economic uncertainties.

As of December 2025, Spirax Group’s shares closed approximately 8.7% higher year-on-year, outperforming the wider FTSE 250 index which saw modest gains of around 3.2%. The improved performance was largely attributed to steady revenue growth across core segments, diversified product offerings, and successful integration of recent acquisitions in heat transfer and peristaltic pump technologies.

Key to this performance was the company’s continued strategic alignment with global sustainability efforts. Spirax’s focus on supporting decarbonisation and energy efficiency commands stronger attention from institutional investors seeking ESG-aligned exposure within UK equities. In particular, its Electric Thermal Solutions and Watson-Marlow divisions posted solid revenue gains due to increased demand in pharmaceutical, biotech, and industrial automation sectors.

The interim results released in August 2025 reported a 6% rise in organic revenue, bolstered by increased aftermarket service contracts and robust demand across Europe and North America. The company’s proactive pricing strategies and cost control measures helped maintain operating margins near 21.5%, only slightly down from the previous year given ongoing macroeconomic pressures.

Market confidence in Spirax was also supported by its capital allocation discipline. The firm continues to balance reinvestment for innovation, modest acquisitions, and shareholder returns. Dividends increased by 4%, reflecting strong cash generation and prudent financial stewardship.

However, investor sentiment remained cautiously optimistic, owing to persistent concerns about global supply chain disruptions and uncertainties around industrial capital expenditure. Spirax’s exposure to cyclical end-markets such as chemicals and energy sectors added layers of volatility during the year, especially in Q2 and Q3 of 2025.

Technical chart performance showed SPX shares beginning the year near 9,200p, dipping briefly in April to around 8,150p, before recovering to over 9,800p by Q4. Trading volumes remained consistent with historical averages, and share buyback activity was used selectively to offset dilution from employee equity programmes.

In summary, Spirax Group held its ground in 2025 by leveraging its global footprint, proprietary technologies, and robust customer relationships, positioning the company for sustained growth into 2026 and beyond, especially if macro headwinds stabilise.

What drove Spirax Group’s (SPX) financial performance in 2025?

Spirax Group’s 2025 performance was underpinned by several pivotal financial and strategic pillars. Its results reflect a company navigating complex operating environments with cautious agility, while internal execution and end-market diversification proved decisive in delivering shareholder value.

1. Organic revenue expansion

The company’s primary growth driver was a 6% organic revenue increase across its three divisions: Steam Specialties, Watson-Marlow, and Electric Thermal Solutions. Geographically, revenue growth was most notable in North America (+8.2%) and Europe (+5.6%), offsetting some softness in China and Brazil.

This balanced growth stems from Spirax’s emphasis on mission-critical applications. Watson-Marlow’s peristaltic pumps and niche fluid path technologies sustained demand from pharmaceutical and food-sector clients, while Steam Specialties continued seeing momentum in energy efficiency initiatives among large industrial users.

2. Acquisitions and integration efficacy

Spirax completed two bolt-on acquisitions in 2024 that bore fruit in 2025. The acquisition of an Italian thermal systems integrator significantly expanded the Electric Thermal Solutions footprint in Southern Europe and the Middle East. Successful integration led to cross-selling synergies and cost savings that directly supported earnings.

The organisation’s strong track record in post-merger integration continues to reassure investors of its disciplined approach to inorganic growth—maximising synergies without overpaying on acquisition multiples.

3. Margin management in inflationary climate

Ongoing inflationary pressures in raw materials, energy, and logistics exerted stress on Spirax’s cost structure. However, tight operational controls, improved manufacturing efficiency, and lean inventory handling allowed the business to limit pressure on margins. Operating margins dipped marginally to 21.5% from 22% YOY but remained among the highest in the sector.

4. FX developments and geopolitical tailwinds

Currency movements had a neutral impact overall. While a stronger pound against the euro and renminbi softened translation gains, strong performance in North America offset FX headwinds. Spirax’s global revenue distribution serves as a partial hedge against regional inconsistencies, a trait appreciated by multinational portfolio investors.

5. Capex and R&D investment

Total capital expenditure for the year reached £125 million, a 12% increase from 2024. Focus areas included automation upgrades in manufacturing sites, expansion of digital diagnostics platforms, and sustainability-aligned innovations. The company maintained its target of allocating ~3.5% of revenue to R&D, in line with long-term innovation targets supporting new product development.

Overall, Spirax’s financial progression throughout 2025 was a function of its balanced business model that melded innovation, disciplined acquisitions, and defensive sector positioning to navigate volatile global dynamics.

What risks and opportunities may shape Spirax Group (SPX) shares in 2026?

Looking ahead, the outlook for Spirax Group in 2026 is shaped by a mix of strategic opportunities and macroeconomic uncertainties. Investors focusing on industrial engineering stocks in the UK should assess both upside potential and latent risks as they consider exposure to SPX shares.

1. Macroeconomic and sector-specific drivers

Improved industrial output projections for the Eurozone and steady GDP growth in key markets like the US and India could benefit capital investment trends, directly enhancing order volumes in Spirax’s core segments. Meanwhile, ongoing decarbonisation trends create positive demand tailwinds for Spirax’s steam and electric thermal systems, particularly as industries seek energy-efficient retrofit solutions.

However, risks persist. A potential slowdown in China due to property sector woes or further contraction in global chemical volumes could challenge the demand rebound narrative. Sticky inflation, albeit gradually declining, could continue to squeeze operating margins via input cost volatility.

2. Strategic investments and innovation cycle

The group has signalled ongoing investment in digitalisation, predictive maintenance capabilities, and sustainability-aligned technologies. Expansion in AI-driven asset monitoring and cloud-based diagnostics is expected to create recurring revenue and deepen customer stickiness. R&D announcements anticipated in mid-2026 will be a critical investor event to monitor.

New product launches aimed at pharmaceutical and industrial gas markets may also open up incremental revenue streams, while a possible acquisition in North America—still under negotiation as of Q4 2025—could prove a significant growth catalyst if concluded under favourable terms.

3. Balance sheet implications and capital strategy

Spirax enters 2026 with a robust balance sheet. Net debt/EBITDA ratio remains under 1.2x, allowing the company to pursue strategic M&A or increase shareholder returns if needed. Analysts anticipate possible expansion of the buyback programme contingent on capex and acquisition cash outlays.

Meanwhile, dividends are expected to grow at a 4–6% annualised rate, maintaining Spirax’s reputation for delivering reliable income growth.

4. Geopolitical and regulatory risk terrain

Export-related policies in China and rising protectionism in trade-sensitive sectors could impact global procurement and supply chains. Spirax’s multinational supply-risk mitigation strategy, however, offers some insulation. ESG regulations are also evolving and could raise compliance costs across global operations.

5. Technical and valuation indicators

Valuation-wise, Spirax currently trades at a forward P/E ratio near 28x, above sector averages but arguably justified by its quality and resilient historical earnings profile. Upside potential in 2026 will depend on consensus earnings revisions and the trajectory of global industrial confidence. Share technicals suggest a bull-bias continuation if near-term resistance at 10,100p is breached.

Overall, 2026 is likely to be a pivotal year for Spirax Group, with both technological advancements and macroeconomic recovery positioning SPX shares for medium-term growth, provided risks are navigated diligently.