Orders ‘mushroom' for aerospace group
Aerospace group Smiths said today that demand for their services had ‘‘mushroomed’’ since the terror attacks in the US.
Smiths specialises in the defence, aerospace and medical sectors and has been one of the few companies to glean some benefit from the uncertainty.
Since the September 11 atrocities, countries have started preparing for a possible war and security levels around the world have been tightened up.
Finance director Alan Thomson said the events had ‘‘reconfirmed’’ military budgets and that demand for the service and repair of planes was ‘‘likely to increase if you are going to have any sort of dispute’’.
Smiths recently bought a US company that makes products which detect drugs and explosives at airports.
Mr Thomson said the firm had been ‘‘absolutely submerged by requests, particularly in the US’’ since the tragic events in New York and Washington.
Products that can detect chemical agents have also been popular.
‘‘Orders have mushroomed since September 11,’’ said Mr Thomson, who added that the inquiries were mainly coming from authorities and governments in the Middle East and North America.
Its medical arm has also benefited - Mr Thomson said demand had swelled after the collapse of the World Trade Centre as hospitals in the New York area stocked up on essential medical supplies.
The medical arm supplies the military as well as civilian hospitals but Mr Thomson said it was a non-cyclical business that rarely saw surges in demand.
The one dark spot on the horizon was Smiths’ civil aerospace business, whose clients include Boeing, GE and Airbus.
Smiths said the immediate outlook for the arm had ‘‘deteriorated’’ since the attacks, with original equipment and aftermarket sales - worth £600m last year - likely to be affected.
Smiths was formed through the multi-billion pound merger of Smiths Industries and rival TI last year, and the London-based group employs about 38,000 people worldwide.
Mr Thomson said that while capacity at the civil aerospace arm was expected to drop, he did not predict a significant redundancy programme.
The group has taken out about 1,000 jobs in the last year, mainly in North America, as part of the restructuring prompted by the merger.
The update came as Smiths reported turnover of £4.96bn for the year ending July 31, up on last year’s figure of £4.65bn.
Before one-off costs, pre-tax profits rose from £427.8m last year to £448.1m.
The group incurred nearly £600m in one-off charges, mainly through the loss made on a disposal.
Including the costs, Smiths slipped into the red, reporting losses of £112.3m against a bottom-line pre-tax profit of £484m last year.
Shareholders will receive a total dividend of 25p per share, a 5% increase on last year’s payout.
