Smiths hails strong first half
British engineering group Smiths showed its expectations for a strong year today by raising its interim payout to shareholders for the first time since 2001.
The dividend increase of 6% to 9.25p a share was announced after the aerospace-to-medical devices group made pre-tax profits of £155m (€223m) in the six months to January 31, an improvement of 16% on a year earlier.
All four of its divisions – detection, medical, aerospace and speciality engineering – achieved higher sales and profits on a constant currency basis, with Smiths optimistic of further growth in the second half.
Chief executive Keith Butler-Wheelhouse said: “This was a strong first half and we expect to sustain this momentum through the remainder of the year.”
He said the acquisition of one of the world’s leading medical device companies - California-based Medex – was expected to have a further beneficial impact once the deal – worth £490m (€704.7m) – closes next week.
Smaller acquisitions, including £61m (€87.7m) spent in the past six months, have already helped the group, which posted 6% higher sales at £1.34bn (€1.9bn).
With Smiths earning more than half its profits in the United States, the dollar’s decline compared with the first half of last year reduced reported sales by £65m (€93.5m) and profits by £9m (€12.9m).
In the company’s largest division of aerospace, sales rose 17% to £514m (€739m) as Smiths benefited from a recovery in the commercial aviation sector as major customers Boeing and Airbus both raised their production rates.
The military part of the business also continued to perform strongly and helped the division to lift profits by £6m (€8.6m) to £39m (€56m).
At Smiths Detection, sales were up 10% to £153m (€220m), with aviation security accounting for around one third of the business.
Smiths, which was founded in 1851 as a family clock and watch-making business, employs around 9,000 people in the UK.
