Smiths Group beats expectations

Technology company Smiths Group saw top line growth across all of its divisions last year, as revenue broke through the three billion barrier.

Revenue for the year ended July 31st rose 7%, or an underlying 5%, to £3,038m from £2,842m the year before, beating the £2,978m expected by the market.

Headline profit before tax was also above market expectations, rising 7% to £554m from £517m the year before. The median forecast from the group of analysts following the stock was £451m. Statutory profit before tax dipped to £366m from £398m.

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The dividend has been hiked to 38p from the previous year's full-year pay-out of 36.25p, a 5% increase and better than the 37.48p expected by the market.

"The economic environment remains uncertain. Pressures on government spending are expected to continue, particularly given the risk of budget sequestration in the US and widespread concerns over national debt levels in parts of Europe. These conditions are likely to continue to constrain those parts of our business with government-funded customers," predicted Philip Bowman, the group's Chief Executive.

"However, our investment initiatives are building a solid foundation to accelerate medium-term revenue growth. We will continue to deliver operational improvements and efficiencies, while balancing increased investment in the drivers of long-term profitable growth with opportunities to enhance margins and returns. Subject to economic conditions, I am confident we can continue to grow sales, deliver further operational improvements, achieve strong cash conversion and improve returns," Bowman declared.

More to follow ...

JH