Shares digital

Smiths Group (SMIN) – Interims PTP: £159m (£134m) Divi: 10.5p (10.5p)

New chief executive Philip Bowman is reviewing operations with a view to boosting performance ‘progressively’ over two-years.

Interim results showed sales and operating profits up just 7%. Pre-tax profits rose 19% due to £10 million lower interest charges after the aerospace sale.

Detection led, with profits up 13% at £31 million. Engineering was up 10% at £66 million and medical flat at £61 million.

Group profit margins stayed at 14.5%, though Bowman plans to raise them and also to boost sales to developing countries.

More engineering acquisitions are likely after the purchases last week of Indufil and Fiber Composite.

Analyst forecasts of £361 million profit this year and nearly £400 million in 2009 look a bit optimistic.

Shares says: If the medical arm can be restored to growth, the shares could rise as explosives detection and petrochemical seals sales are strong. But on a current year PE of 14 this is in the price.

by: Timon Day