A focus on fast-growing engineering and technology sectors helped Smiths Group to another strong set of financial figures.
Boosted by a recovery in its commercial aviation activities, the engineering group increased sales and profits in each of its four divisions — aerospace, detection systems, medical and speciality engineering — during the six months to January. Total group sales rose six per cent to £1.34bn, yielding a 16 per cent increase in pre-tax profits to £155m.
While there was good news across the group, Smiths was particularly upbeat over the prospects for its aerospace division. Smiths Aerospace has a foothold in many of the world’s biggest projects, including the Airbus A380, the Boeing 787 Dreamliner, the Joint Strike Fighter and the US101 Presidential helicopter fleet.
A recovery in the commercial aviation sector helped push up the division’s sales by 17 per cent and profits by almost a quarter. ‘Smiths Aerospace has entered a period of strong growth which is likely to be sustained for a number of years,’ the group told its shareholders.
Smiths Detection also enjoyed strong sales and profits growth — 10 per cent and 22 per cent respectively — thanks to continuing strong demand for technology to secure ports, borders and airports.
Customers for the UK group’s detection systems range from the MoD to the New South Wales prisons department, which has ordered equipment from Smiths in a bid to prevent contraband being smuggled into jails.
The group is also working with the US Transportation Security Administration on a pilot project to scan passenger documents for traces of explosives, and on new ways to screen air freight.
Smiths Medical is set for significant growth following the completion of its deal to buy US healthcare technology specialist Medex.
The acquisition will put Smiths in the US medical technology big league, adding about £300m to the annual sales of Smiths Medical.
Even without Medex the medical business was a strong performer in the last half year, although the turnover and profit gains it made were diluted by the effects of the weak dollar.
The fourth Smiths division, Speciality Engineering, rounded off the upbeat interims with a nine per cent sales boost and a 14 per cent increase in profits.
Within Speciality Engineering, Smiths said its microwave components business was performing particularly well, with new applications emerging in defence communications and medical electronics, including hospital scanners. The strong interims leave Smiths well placed for the second half of its year, according to the company, which indicated that further acquisitions were possible.
Alongside its half-year figures, it also announced the £6m purchase of US Seal, a specialist in mechanical pump seals. The company will join Smiths’ John Crane business within Speciality Engineering.