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Engineering firm Smiths Group (SMIN) reported pre-tax profits of 397.9 million pounds for the year ended 31th July, up 6.6% on its 2010 performance. Due to cuts in government defence spending, in the US and Europe, the firm has announced a restructuring programme, expected to make annualised savings of 40 million pounds in the detection division by the end of 2014. Additionally, the medical division, which rejected a 2.45 billion pound cash offer from Apax earlier in the year, reported a 6.5% increase in headline operating profit to 196 million pounds. The shares grew 21p to 696.5p.
"Smiths Group has made good progress against a deteriorating economic backdrop. We continue to build a solid foundation for future growth through further operational efficiencies and greater investment in new product development, sales and marketing effectiveness, expansion of our emerging market exposure and targeted acquisitions. The results again demonstrate the significant benefits delivered by our sustained focus on operational improvement that have driven margins to new highs. At the same time, we increased investment in future growth drivers, such as company-funded research and development, up 5%, and spent more on sales and marketing. We have again delivered strong cash conversion in line with guidance, and increased the annual dividend ahead of inflation. "The economic outlook remains uncertain and continued pressures on government spending, which particularly impacted Smiths Detection, Medical and Interconnect are likely to continue to constrain revenue opportunities of some of our businesses during fiscal 2012. However, we still see further potential to drive operational improvements, enhance margins and deliver strong cash conversion." Philip Bowman Chief Executive Smiths Group plc Divisional highlights*
Highlights · Sales up 3%; headline operating profit up 5% · Headline operating margin up 40 basis points to 18.2% · Company funded R&D increased by 5% to £99m · Restructuring programme savings of £15m; £56m to date from £70m target · Cash conversion strong - with free cash flow of £236m and year end net debt of £729m · Dividend up 7% · Return on capital employed up 40 basis points to 17.0%
http://www.investegate.co.uk/Article.aspx?id=201109280700160525P
Investec initiates buy on Smiths Group, target price 1100p.
Smiths Group Chief Executive Philip Bowman said: "Smiths Interconnect operates in a highly fragmented market that offers great scope for consolidation. PDI is its sixth and largest acquisition in three years, all adhering to our strategic criteria of adding complementary technologies, extending geographic reach or leveraging existing sales networks. This latest transaction expands its range of power quality technologies into new, specialised, high growth markets."
SMITHS INTERCONNECT BUYS POWER HOLDINGS FOR $235M Smiths Interconnect, a division of global technology business Smiths Group plc, today announces the purchase of Power Holdings Inc. (PDI), a leading designer and manufacturer of specialist power distribution, conditioning and monitoring systems. The purchase price of $235m will be subject to post closing adjustments with respect to working capital at completion. Based in Richmond, Virginia, PDI is the parent company for Power Distribution, Inc., Marelco Power Systems, Inc. and Onyx Power, Inc. It produces power distribution units, static transfer switches, remote power panels, power conditioning units, medium and low voltage transformers and patented power monitors used mainly in data centre and alternative energy applications. The acquisition, from private equity firm Bertram Growth Capital I, L.P., will be cash-funded and is subject to regulatory approval.
http://www.investegate.co.uk/Article.aspx?id=201109020700105119N
Smiths Group, the UK industrial conglomerate, operates across the medical, oil and gas and explosive detection sectors. Smiths' diverse nature has proven to be both a blessing and a curse in recent years. While its exposure to a range of end-markets and industries helped maintain robust profits during the downturn, it has also meant that investors have applied a conglomerate "discount" to a company that does not fit easily into any one identifiable category. Smiths is trading on a 2012 PE of close to 11x, a discount to the UK capital goods sector and offers a dividend yield of 3 per cent. Even in the absence of any corporate restructuring, we believe this undervalues a company that sells into well-diversified markets and has significantly improved its operating performance. Buy, says the Scotsman.
Smiths Group was in focus yesterday on renewed hopes of a break-up of the £4.3billion engineering and technology conglomerate. Shares in airport scanners company Smiths, which earlier this year rebuffed a £2.45billion private equity offer for its medical business, rebounded 42p to 1149p following recent weakness, according to the Daily Express.
UBS reiterates buy on Smiths Group, target price reiterated at 1600p
RBC reiterates underperform on Smiths Group, target price cut from 1200p to 1000p.
Industrial orders drive sales at Smiths Group By Benjamin Chiou Date: Wednesday 08 Jun 2011 LONDON (ShareCast) - Revenue growth in Smiths Group's John Crane division helped underlying sales in the first ten months push ahead of the prior year, offsetting weaker sales from Smiths Detection. Meanwhile, underlying group headline operating profit in the ten months to 28 May improved, benefiting from ongoing operational improvements and self-help initiatives, the group said. John Crane - which supplies advanced technology industrial products for the major process industries - built a strong order book during the period, which drove strong sales growth, particularly in the oil and gas markets. Margins are also ahead of last year, helped by higher volumes and cost savings. However, the company warned that the rate of sales growth may ease slightly towards the end of the year, as a result of tough comparators. Smiths Detection designs and manufactures sensors that detect and identify explosives, weapons, chemical agents, etc. The division continued to trade in line with guidance given on 3 May when the company said that trading had fallen short of expectations as a result of delays to orders. "The sales trends seen in the first half are likely to continue for the full year, although there remains some uncertainty on the timing of deliveries and sales against military orders already received," the group said. Sales at medical devices division Smiths Medical are broadly at the same level as the first half, held back by pressure on healthcare budgets and reduced health insurance levels.
CONT. Smiths Medical has improved operating margins as it continues to benefit from its self help initiatives. The year to date sales trends are at a broadly similar level to those achieved in the first half. The tough trading environment is expected to continue with pressure on healthcare budgets in many markets and reduced health insurance levels. Margins should continue to benefit from our sustained focus on operational improvements and self-help. At the same time we continue to invest more in new product development and focus on improving sales and marketing effectiveness to position the business for future growth. Smiths Detection has continued to trade in line with guidance given in the trading update on 3 May. The sales trends seen in the first half are likely to continue for the full year, although there remains some uncertainty on the timing of deliveries and sales against military orders already received. Full year margins are likely to be affected by the associated operational gearing. In the first 10 months, Smiths Interconnect delivered underlying sales growth, although the rate of growth has slowed since the first half. This was caused by sales declines to defence customers, reflecting US Department of Defense budgetary pressures, and slower sales to wireless customers, due to the timing of investment in the build-out of wireless networks. Sales to rail, medical, automation and test markets have been strong. Margins remain ahead of the prior year reflecting higher volumes and cost reduction initiatives. Reported sales have been boosted by the strong performance of IDI which was acquired in April 2010. Flex-Tek has continued to see underlying revenue growth driven primarily by higher sales of aerospace components and heating elements. Sales have also benefited from market share gains and pricing improvements. Flex-Tek is expected to deliver sales growth for the full year although the comparator will become slightly tougher and the outlook for US residential construction remains uncertain. Despite pressure on margins from input cost inflation, overall margins should benefit from the increased volumes and the associated operational gearing. Headline operating cash conversion has strengthened since the half year; net debt was £797m as at 28 May 2011, having taken account of the payment of the interim dividend in April.
SMITHS GROUP PLC INTERIM MANAGEMENT STATEMENT At reported exchange rates, Smiths Group delivered growth in sales, headline operating profit and margin improvement in the 10 months to 28 May 2011. At constant currencies and excluding the benefit from acquisitions, underlying sales were ahead of last year driven primarily by growth in John Crane offset by lower sales from Smiths Detection. Underlying Group headline operating profit is also ahead of the same period last year, benefiting from ongoing operational improvements and self-help initiatives. John Crane has continued to build a strong order book which has driven sustained underlying sales growth in the first 10 months, particularly from the oil and gas markets. Margins are also ahead of last year, benefiting from the higher volumes and from further cost savings generated by its restructuring programme. The strong order book supports continued growth in the full year, although the rate of growth may ease slightly against a strong comparator period. Full year margins should remain strong notwithstanding our continued investment in growth opportunities and some adverse mix effects.
http://www.investegate.co.uk/Article.aspx?id=201106080700070341I
on low volume today - C'mon SMIN... Would hope more investors were encouraged to get into a company like SMITHS - this will pick up again soon.
"These figures demonstrate the benefit of our self-help initiatives and operational improvements across the Group. The business has performed well against a tough but steadily improving economic environment. First half margins have reached new highs as a result of volume leverage, better pricing and our focus on operational improvement and restructuring. Sales benefited from organic growth and recent acquisitions, despite order delays in Smiths Detection, a tougher trading environment and SKU rationalisation holding back Smiths Medical. Cash conversion has remained strong apart from the investment in Smiths Detection working capital to support second half deliveries. Return on capital employed increased 240 basis points to 17.3%. "Looking ahead, we are enhancing our focus on top-line growth through increased investment in new product development, improved sales and marketing effectiveness, building our footprint in emerging markets, and targeted acquisitions. At the same time, we remain focused on delivering further savings from our restructuring and other initiatives. Cash conversion and improving returns continue to be key priorities and we remain confident of meeting expectations for the full year." Philip Bowman Chief Executive Smiths Group plc
Highlights · Strong financial performance with sales up 7% and headline operating profit up 15% · Headline operating margin up 120 basis points to 17.4% · Company funded R&D increased by 14% to £49m · Restructuring programme generated savings of £6m; £45m to date from £70m target · Cash generation strong - apart from £32m working capital investment for Detection · Dividend returns to growth, up 7% · Return on capital employed up 240 basis points to 17.3%
http://www.investegate.co.uk/Article.aspx?id=201103230700094307D
Smiths Group profits leap By Lee Wild Date: Wednesday 23 Mar 2011 LONDON (ShareCast) - Medical devices and airport scanners maker Smiths Group has reported a healthy increase in half-year profits, up around a quarter. The company grew profit before tax for the six months to 29 January to £188.6m from £148.2m a year ago, and headline profit, which excludes lots of one-off items, by 25% to £224m. Revenue was up by 7%, or 2% on an underlying basis, to £1.37bn from £1.28bn last time. Over a third of the increase was attributed to currency gains on overseas sales. The firm rejected a £2.45bn approach in January for its biggest division, Smiths Medical, where sales fell 2% during the period, but headline operating profit rose 5%. Cost savings and restructuring helped improve margins. A 9% slide in sales and 11% fall in profit at Smiths Detection was blamed on “variable order flow in military and ports & borders”. Thecompany’s restructuring programme has generated another £6m of savings, taking the total since its implementation in 2008 to £45m. Smiths wants £70m by 2012/13. “The business has performed well against a tough but steadily improving economic environment,” chief executive Philip Bowman said. "Looking ahead, we are enhancing our focus on top-line growth through increased investment in new product development, improved sales and marketing effectiveness, building our footprint in emerging markets, and targeted acquisitions.” There’s an interim dividend of 11.25p a share, up 7%.
Looking to this week Smiths Group (SMIN) also gets a look-in on Wednesday in a blaze of bid speculation. There have been rumours circulating that the engineering conglomerate will attract a bid, given how the market views it as a value play. However, bid talk aside, this stock, with interests including airport security machinery, has been given the thumbs up by analysts, as terror threats and further unrest are likely to result in a pick-up in orders for the company, and there is a good chance the results could reflect this.
Dem birdies aint singin in my garden...they're mighty cold and hungry! Nice to see your back to your "nature". Things were getting quiet round here...ahh the sweet sound of bird song...
Tweet...Tweet ? :)
I read somewhere on here that the big trades at end of day are usually balancing trades. Does it follow that as on here there is a "sale" of £2million at 16.35 that buys outweighed sells by that amount? Hope this isn't too stupid a question!