Smiths is cautious on forecast

SMITHS, the technology company which makes airport X-ray scanners and mechanical seals on medical equipment, yesterday said its underlying annual profit fell 21 per cent but beat forecasts.<br /><br />The group said its outlook for the rest of the year was cautious.<br /><br />&ldquo;Although statisticians are pointing towards a number of signs suggesting economies are beginning to move out of recession I think it&rsquo;s very early days and one is best being cautious,&rdquo; chief executive Philip Bowman said. He declined to give exact current order figures for the group&rsquo;s Detection unit but said cargo screening orders had increased significantly, with around &pound;26m of orders booked in the first two months of the financial year.<br /><br />Smiths also joined a growing list of UK companies to announce the closure of its final salary pension plan in the UK. Dairy Crest on Tuesday announced plans to close its defined benefit scheme, following Barclays and BP earlier in the summer.<br /><br />Smiths&rsquo; pension deficit ballooned to &pound;464m at the half-year, from &pound;11m six months earlier, after the value of equity investments collapsed, but Bowman said this deficit had now been reduced by &pound;125m.<br /><br />&ldquo;We continue to look with the trustees of the allocation of types in investments within the pension fund but in terms of direct actions, we have taken most of those during this year, as shown in the deficit reduction,&rdquo; Bowman said.<br /><br />Evolution analyst Nick Cunningham said: &ldquo;The underlying results were very weak and the company has a significant lack of visibility going into the current year.&rdquo; The firm posted profit of &pound;371m on sales of &pound;2.66bn from &pound;2.3bn last year.