Smiths Group has recorded a FY pretax profit of £451m, from a year-ago profit of £459m. Dividend was 42p a share, from 41p.
Revenue came in at £2.95bn, from £2.90bn.
"Smiths Group delivered a robust performance this year. We achieved good growth in headline operating profits with associated margin expansion in our Medical, Detection and Interconnect divisions, driven by revenue growth and business improvement initiatives," said CEO Andy Reynolds Smith.
"However, significant headwinds in the global energy markets impacted John Crane, primarily in the sales of first-fit equipment; aftermarket was more resilient with underlying revenue down 4%. For Smiths Group as a whole, more than half of our revenue continued to come from the recurring aftermarket for our products and services.
"In the first year as CEO, my aim has been to lay the foundations for future value creation through stronger growth, improved competitiveness, more robust and consistent execution and a better focused portfolio. We have undertaken a strategic review across the Group to examine in detail the sustainable growth characteristics of the markets we serve and our competitive positioning within those markets.
"We start from a solid base with a Group of well-run and well-positioned businesses, with nearly two-thirds of Group revenues coming from market segments that have attractive growth rates. We see clear potential to increase our exposure to faster growing market segments and to improve our overall market competitiveness in the medium term as we take steps to focus our portfolio.
"Our strategic review gives us a clearer sense of where to focus investment in order to drive future growth and technological differentiation, and we have aligned our capital allocation process accordingly.
"As a result, we were able to commit $710m for the acquisition of Morpho Detection, and to make progress on the disposal of non-core assets. We will increase expenditure on research and development by around £20m in the coming year to invest in future growth opportunities, with a particular focus on our digital future.
"In parallel, we are implementing measures across the business to ensure continuous improvement and greater consistency of execution in everything we do in order to deliver productivity improvements across the Group. I am confident that, over the long term, our strategy will drive Smiths to become one of the world's leading technology companies.
"We anticipate a broad continuation of the trends experienced in 2016, with ongoing challenges in John Crane's end markets being more than offset by moderate underlying revenue growth in our other divisions.
"As is typically the case, Group performance in 2017 is expected to be weighted towards the second half. We expect cash conversion to continue to be strong in the coming year and the recent depreciation of sterling is expected to provide a tailwind to reported revenue and operating profit, should current rates prevail."