Smiths Group PLC (SMIN) - Interim Management Statement
RNS Number : 5833R
Smiths Group PLC
20 November 2012
London, 20 November 2012
For immediate release
SMITHS GROUP PLC INTERIM MANAGEMENT STATEMENT
Smiths Group Chairman Donald Brydon made the following Interim Management
Statement at the Company's Annual General Meeting in London today.
In the three months to 3 November 2012, Smiths Group has grown underlying
revenue across all divisions. Underlying headline operating profit for the
Group was also ahead of the same period last year with progress in all
divisions except Smiths Medical which, as previously guided, substantially
increased investment in sales and marketing in higher growth markets. The
impact of foreign exchange translation represented a slight headwind to the
level of profit growth. Overall, expectations for the year remain in line
with guidance given at the full year results, as announced in September.
John Crane delivered sustained underlying revenue growth in the first quarter,
continuing the same trend as the second half of last year. This reflected
on-going demand for its first-fit original equipment and aftermarket
services. Operating profit also rose, despite increased investment in growth
drivers such as sales and marketing and a weaker performance from the John
Crane Production Solutions business. We have expanded the order book in the
quarter with a positive book-to-bill ratio and we expect to sustain modest
revenue growth into the front end of the second half. Beyond that, we remain
cautious as some of our customers have signalled concerns about the potential
impact on their capital expenditure from any further economic slowdown.
Smiths Medical grew underlying revenue with demand for single-use consumables
more than offsetting a slight weakness in hardware sales compared with the
same period last year. As anticipated, headline operating profit is lower,
reflecting the annualised effect of our increased investment in sales and
marketing in emerging markets which was weighted towards the second half of
last year. Looking to the balance of the year, the introduction of the
medical device tax in the US in January is expected to constrain growth and
margins. We will seek to offset these impacts through operational
improvements and a continuing focus on higher margin products.
Revenue and headline operating profit have shown underlying improvement at
Smiths Detection. The performance improvement programme continues to deliver
cost savings and we have completed the first shipments from our new
manufacturing facility in Malaysia. Looking ahead, the order book has
continued to grow significantly compared to previous years and is expected to
support increased revenue for the full year. However, as previously guided,
overall performance may be affected by the level and timing of government
Smiths Interconnect delivered underlying growth in revenue and headline
operating margin, albeit against a weaker comparator period. Revenue rose on
the back of improvements in connectors and microwave, while power management
experienced continuing underlying declines. As previously guided, the outlook
for the rest of the year remains challenging, given the uncertain economic
outlook and the risk of US defence budget cuts.
Flex-Tek has started the year well. Underlying revenue growth was driven by a
strong performance in aerospace and US residential construction. Given the
division's high operational gearing, headline operating profit and margins
improved significantly as a result of the higher volumes. The outlook for the
full year remains positive driven by the aerospace order book and the
improving trend for US housing.
At 3 November, net debt was slightly higher at £802m. In October, the Group
successfully completed a $400m bond issue, with a 10-year maturity and priced
at a fixed coupon of 3.625%.
This press release contains certain forward-looking statements with respect to
the operations, performance and financial condition of the Group. By their
nature, these statements involve uncertainty since future events and
circumstances can cause results and developments to differ materially from
those anticipated. The forward-looking statements reflect knowledge and
information available at the date of preparation of the press release and the
Company undertakes no obligation to update these forward-looking statements.
Nothing in this press release should be construed as a profit forecast.
Peter Durman: +44 (0)20 7808 5535
Colin McSeveny: +44 (0)20 7808 5534
Anthony Cardew - Cardew Group: +44 (0)20 7930 0777
Smiths is a global technology company listed on the London Stock Exchange
(SMIN) and operates a sponsored level one ADR programme (SMGZY). A world
leader in the practical application of advanced technologies, Smiths Group
delivers products and services for the threat & contraband detection, medical
devices, energy and communications markets worldwide. Our products and
services make the world safer, healthier and more productive. Smiths Group
employs around 23,000 people in over 50 countries. For more information visit
This information is provided by RNS
The company news service from the London Stock Exchange
IMSLLFSFLVLIFIF -0- Nov/20/2012 14:30 GMT
Press spacebar to pause and continue. Press esc to stop.