Engineering firm reported 18% growth in H1 revenue and 31% growth in PBT
Companies: Smiths Group Plc
FTSE 100 Engineering firm Smiths Group saw its shares jump 4% as the markets opened on Friday after reporting better than expected H1 results aided by particularly solid performance in its x-ray business and its new strategy.
Smiths reported sales of £1.616bn, an 18% jump on the previous year and higher than the £1.58bn forecast by Morgan Stanley. Operating profits for the period rose 8% to £277m, and pre-tax profit jumped 31% to £248m.
The firm's performance was given a boost by Smiths Detection, its x-ray business, which offset average performance elsewhere. Subsidiary John Crane's results were fairly resilient, but Smiths Medical suffered a weak first half.
CEO Andy Reynolds Smith said that whilst sales were flat for the first six months, Smiths had delivered solid underlying profit growth, adding that Smiths Detection had delivered particularly strong growth, offsetting declines at Smiths Medical.
"...reinforcing our view that the acquisition of Morpho Detection makes compelling sense and will increase our exposure to a growing market.”
Mr. Smith said the acquisition of Morpho Detection was in the "final stages", and was expected to complete shortly. Despite the bumper result, he reiterated that the firm's outlook for 2017 is unchanged, with performance expected to be slightly weighted towards H2.
Smiths' share price jumped 4% early on Friday, and is up more than 50% in the past year. It's currently trading at a price/earnings ratio of 18.3 and is forecasting 7% EPS growth in FY17 (31 July) and 9% in FY18.