Smiths’ R&D focus pays off

policy of increased investment in R&D and carefully targeted acquisitions again proved a sound business strategy in 2005, with underlying growth across its four divisions.

Smiths’ solid, if unspectacular, performance — with pre-tax profits rising to £310m from £300m in 2004 — was chiefly achieved through a focus on using innovation and advanced technology to gain a competitive advantage and generate future sales.

Chief executive Keith Butler-Wheelhouse said Smiths will continue in the same vein in the next 12 months.

‘The plan for 2006 will follow a consistent formula — driving forward the top line, controlling costs and finding value-enhancing acquisitions. We are confident that we can deliver continued growth from across the Smiths group,’ he said.

The Smiths Detection arm, which operates in the transportation, military and ports and borders sectors, enjoyed 16 per cent growth, fuelled mainly by the introduction of new products. These include the latest Ionscan trace equipment, which simultaneously screens for explosives and narcotics, and the Sentinel II portal, which speeds the processing of passengers through checkpoints. The US Transportation Security Agency has already purchased 25 of these units.