Smiths on track despite mixed trading in third quarter

Smiths Group, the global technology firm listed on the FTSE 100, said that its full-year guidance remains unchanged after underlying revenues and profits in the first three quarters were ahead of last year.

Smiths Group, the global technology firm listed on the FTSE 100, said that its full-year guidance remains unchanged after underlying revenues and profits in the first three quarters were ahead of last year.

The company said that margins in all divisions except one improved on last year. "Overall, expectations for the year remain in line with the outlook given at the interim results in March, albeit with a slightly different mix by division," the firm said on Friday.

The outlook for the John Crane division - providing services for major process industries including oil. gas and power generation - has improved over the last few months. The company had previously warned of slower demand in the second half but said on Friday that the unit delivered "sustained underlying revenue growth" and higher order book than last year.

Continued sales growth was also seen in the medical device and equipment subsidiary, Smiths Medical, though profitability was behind last year due to additional investment as well as the introduction of the US medical device tax in January, which the company warned about in March.

Smiths Detection, which makes sensors to detect explosives and other dangerous materials, saw an improvement in both the top and bottom lines. However, the company said that second-half sales and margins will be affected by timing issues with some contracts, "reflecting pressures on government spend and delays to airport infrastructure programmes".

The electronic components division, Smiths Interconnect, is expected to have a "challenging" final quarter, despite delivering underlying growth in the first nine months, due to a strong prior-year comparator and uncertainty in several end market "particularly with on-going weakness in Europe and the risk of US defence budget cuts".

Meanwhile, things were a little brighter at the fluid management unit, Flex-Tek, where the company has seen growth in revenue and profit due to a strong performance in aerospace and US residential.

Recommended

How to profit from India’s high-tech recovery
Share tips

How to profit from India’s high-tech recovery

Professional investor David Cornell of the India Capital Growth Fund, selects three of his favourite Indian stocks to buy now.
27 Sep 2021
Share tips of the week – 24 September
Share tips

Share tips of the week – 24 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
24 Sep 2021
Three strong Asian stocks trading at bargain prices
Share tips

Three strong Asian stocks trading at bargain prices

Professional investor Nitin Bajaj of the Fidelity Asian Values investment trust picks three stocks that dominate their industries, earn good returns o…
20 Sep 2021
Why it pays to face up to your investment mistakes
Investment strategy

Why it pays to face up to your investment mistakes

Buying stocks can be a complicated business. But selling stocks can be tricky, too – even if you sell for the right reasons. Max King explains how to …
17 Sep 2021

Most Popular

A nightmare 1970s scenario for investors is edging closer
Investment strategy

A nightmare 1970s scenario for investors is edging closer

Inflation need not be a worry unless it is driven by labour market shortages. Unfortunately, writes macroeconomist Philip Pilkington, that’s exactly w…
17 Sep 2021
What really causes inflation? Here’s what prices since 1970 tell us
Inflation

What really causes inflation? Here’s what prices since 1970 tell us

As UK inflation hits 3.2%, Dominic Frisby compares the cost of living 50 years ago with that of today, and explains how debt drives prices higher.
15 Sep 2021
The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021