Smiths Group Share Price (SMIN)

Decent move today! :)

The half year figures are very satisfactory. The sell off or demerge "Detection" and "Interconnect" divisions has been progressing and we can expect an announcement this calendar year. The second half trading will show good progress and the buy-back is underway. The resulting group ( "Flex-tex" and John Crane) will be a higher margin business and "Interconnect" has some exposure to defence spending which will help with the sale price. What not to like! The only thing not in its favour right now is the US housing market. The shares are not highly rated and there is scope for some re-rating.

When I commented on the results at the end of September I described SMIN as OK but all rather pedestrian with Roland Carter sounding a bit flat. It is amazing what outside pressure can bring to bare, todays announcement is transformational and yet no one has entered the chat room. They are going to sell off or demerge "Detection" and "Interconnect" and concentrate on "Flex-tex" and John Crane. These last two are in attractive energy and industrial markets where the margins are high. This will throw off cash which will be returned to shareholders through buy-backs and or demerger. I listened into the Q&A session after the announcement and there was, what I interpreted as, a positive response from analysts. They would like to see the ongoing business listed in New York (so would I) but that is not likely to happen. So this is going to be a year of significant change and shareholders will, IMHO, be better off by the end of it than they are today even after a near 11% rise. How exactly this value is unlocked depends in part on how much is returned to shareholder in cash and/or a spin off demerger. Carter is not the most fluent speaker but I think he will see this all through and then......

Excuse my ignorance. Without plowing through all the reports, does anybody know the 'real' defence content ? That is, for weapons etc, excluding security at airports etc.

By 'boring' you mean careful stewardship of the business, eh.

I remember when people thought GEC, was boring,

that morphed in to Marconi, which the City scribblers initially loved - we know what happened next..