Smiths sees half year results slip on competition

Adam Hignett
MULTINATIONAL engineering firm Smiths Group saw its shares dip yesterday in early trading as its half year report saw revenues and profits slide.

The deterioration was led by Smiths’ detection and interconnect divisions which saw revenues decline by eight per cent and six per cent, respectively.

The company blamed an increasingly competitive market and delays in customer spending for the declines in these sectors, with slower defence spending weighing on wireless and radio sales.

The firm saw moderate growth in its medical division where revenues rose by six per cent due to strong ambulatory infusion performance and a recovery in disposables.

Smiths said it was maintaining its investment levels in the faster growing emerging markets despite a disappointing performance in China last year. Overall revenue at the company declined two per cent in the six months to 31 January to £1.4bn, with pre-tax profits sliding three per cent to £208m.

The company said it expected overall underlying performance to pick up during the second half, with improvement in its interconnected division offsetting a slowdown in medical.

“We are focused on investing to drive sales growth in what are attractive long-term markets, and on delivering further operational improvements, while generating strong cash conversion and returns,” said chief executive Philip Bowman.

However, shares rallied, ending up 1.87 per cent higher at 1,200p.