Smiths profit falls 13%; to spin off medical division
Source - SMW
Industrial technology company Smiths Group booked a 13% fall in first-half profit as it revealed plans to spin off its under-performing medical business into a separately listed company.
Pre-tax profit for the year through January declined to £174m, even as revenue rose 2% to £1.57bn.
On an underlying basis, pre-tax profit fell by a more modest 1% to £216m.
The company's operating margin fell 140 basis points to 13.5%.
Smiths Group declared an interim dividend of 14.1p per share, up 2.2% on-year.
The company said it expected to complete the demerger process during the first half of calendar 2020, conditional on shareholder approval.
'Smiths delivered another good performance in the first half with sustainable growth driven by John Crane, Flex-Tek and Smiths Interconnect,' chief executive Andy Reynolds Smith said.
'The strong results from these divisions were partly offset by the anticipated decline in Smiths Medical and the timing of deliveries in Smiths Detection, with both on track to deliver growth in the second half.'
'Today we have announced our plans for the separation of Smiths Medical to create two stronger companies each focusing on accelerating the execution of their plans and maximising the opportunities in their respective markets.
'We reaffirm our outlook for 2019.'
'We expect to continue to deliver sustainable underlying revenue growth of at least 2%, underpinned by current trading of our four industrial technology divisions and by the increasing contribution from new product launches in Smiths Medical.'