Report by Iron Blue Financials
SPX’s Iron Blue score increases by +5 y/y to 21/60. This reflects: 1) A decade high (10% PBT adj) in stripped out one-off costs. 2) Balance sheet contract assets rising to £12m from £3m. 3) PPE capex exceeding depreciation by 19% PBT adj, a decade high. 4) Lengthened expected life for plant and machinery (from 8-10 years to 10-15, above Capital Goods peers). 5) Likely higher net finance charge post €225m debt refinancing (Sep 23). 6) Additional accounting policies disclosure highlighting management discretion when accounting for cost of inventories. 7) Bad debtor provisioning at a decade low but debtors overdue by >90 days and not provisioned up to 9% of receivables (2021: 5%, 2020: 3%).