(Sharecast News) - Smiths Group reinstated its dividend as the FTSE 100 engineer said business had stabilised after a sharp drop in annual profit.
Statutory operating profit fell 26% to £241m in the year to the end of July as revenue rose 2% to £2.55bn. Headline operating profit fell 11% to £382m and underlying revenue fell 1%
After scrapping its interim dividend in March, Smiths proposed a total dividend for the year of 35p per share, down from 45.9p a year earlier.
Smiths said the payout reflected its strong performance and confidence about the future. It said trends had stabilised and group underlying revenue was down 5% in the past four months. The company continued to withhold financial guidance because of uncertainty over the extent and duration of the Covid-19 crisis.
Revenue rose 3% in the first half and fell 4% in the second half as the Covid-19 crisis affected performance. Smiths said its results were resilient and reflected its high aftermarket revenues.
Chief Executive Andy Reynolds Smith said: "The strength of performance during the year and our confidence in the future support the proposed total dividend. We remain prudent as we continue to navigate the ongoing uncertainty. We are seeing a stabilisation of recent trends but we are not complacent and are continuing to strengthen the business to deliver sustainable outperformance in the future."
After delaying the planned sale of its medical business in March the company said its intention to separate the division was unchanged. Smiths said it was on track for £70m of restructuring gains by the 2022 full year.
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