Robust core markets and a series of acquisitions designed to encourage greater R& D helped Smiths Group establish a solid financial platform for 2006.
The UK-based global technology company saw its four divisions — Aerospace, Detection, Medical and Speciality Engineering — all perform well. This boosted group sales by 19 per cent to £1.6 billion, and saw an increase of 18 per cent in headline pre-tax profits to £183 million for the first half of its financial year.
Smiths’ acquisition of technology-led businesses that strengthen its existing capabilities continued. In September — to complement its Interconnect division — the group paid £19m for US company Millitech, which specialises in millimetre wave technologies for communications systems.
Two months later it bought Livewave for a further £9 million, enhancing its ability to network the sensors used in wide-area security systems. And last month it completed the £15 million acquisition of Lorch Microwave — a microwave filter specialist that also fits into Smiths’ Interconnect division.
Interconnect — part of the group’s Speciality Engineering division — is a global supplier of components and subsystems for connecting, protecting and controlling critical electronic and radio frequency systems.
It has benefited from a resurgence in investment in mobile phone networks, and from continued spending on advanced military communications. Key projects currently underway include connectors and electronic filters for the second phase of the Eurofighter Typhoon, cables for the F-35 JSF, satcom for the Boeing 787 and microwave assemblies for Raytheon’s MFRFS network system.
The new acquisitions brought more key projects into the Smiths fold. For example, Millitech has secured the contract to make Qinetiq’s Tarsier system, which detects debris on airport runways. And in the medical field, high-grade connectors are being designed for GE’s MRI machines. Smiths hopes these programmes will help continue the growth that saw the Speciality Engineering division record a 21 per cent profits increase.
In Smiths Aerospace, strong demand in both the defence and commercial sectors saw sales increase by 10 per cent. This was due to a combination of key R& D programmes for the A380, 767 and 787, and a favourable review by the US government which ensured that significant projects such as the F-18, F-22 and JSF remain funded.
Smiths said its various technologies are still in demand around the world, with 13 US airports introducing its Sentinel II automatic search device.
Operators in China, Malaysia, Thailand, India, Pakistan and Japan have also continued to buy its x-ray and trace equipment. The steady global growth for medical devices, coupled with the acquisition of Medex, led to a 50 per cent increase in sales in Smiths Medical, which last week announced plans to move hundreds of jobs from the UK to Mexico