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(Sharecast News) - Smiths Group said trading was increasingly affected by the Covid-19 crisis as the engineering company reported a 6% increase in operating profit.
Operating profit from continuing operations in the year to the end of January rose to £186m from £175m as revenue increased 8% to £1.24bn. Pretax profit almost halved to £46m from £89m.
The FTSE 100 group's John Crane US seals and fastenings business, detection division and Flex-Tek fluid and gases unit registered good performances in the first half but its Interconnect electronic components business suffered from market weakness.
Smiths said in the first half only the Chinese operations of John Crane were disrupted by the coronavirus pandemic. Trading to the end of March was affected by early Covid-19 disruption with an increasing impact on demand and supply.
As announced in a trading update on 31 March, Smiths has scrapped its half-year dividend and delayed the demerger of its medical business in the midst of the coronavirus crisis. The company said in the eight weeks to the end of March underlying revenue from continuing operations rose by mid-single digit figures.
Excluding its medical business Smiths said demand had weakened as some customers closed facilities temporarily and energy prices reduced capital spending in response to the oil price crash. Many airports are closed or running at reduced capacity with delays affecting Smiths' revenue.
Some companies are bringing forward installation, service and software activity and Smiths' detection division has a record order book, the company said.
Andy Reynolds Smith, the group's chief executive, said: "We started the year strongly, delivering good growth and cash across the Group. This positive start has also continued during the first two months of the second half, demonstrating the quality and financial strength of our business.
"Over the coming months, Covid-19 presents significant uncertainty and our number one priority is to keep our people safe and well. We enter this period confident in our resilience and preparedness: financially, operationally and strategically."
30 Aug 2023 08:04
IN BRIEF: Smiths Group buys US firm Heating & Cooling Products
Smiths Group PLC - London-based engineering firm - Acquires Heating & Cooling Products Inc, a Ohio-based manufacturer of heating, ventilation and air conditioning products. Smiths is paying USD82 million on a cash and debt-free basis for HCP, which recorded USD69 million in revenue in the 12 months that ended July 31. Smiths doesn't provide HCP's recent earnings but says the acquisition is done at 7x multiple to HCP's estimated 2023 earnings before interest, tax, depreciation and amortisation. HCP will be integrated within the Flex-Tek division of Smiths. The UK company says the acquisition expands its presence in the North American HVAC market, highlighting HCP's axial and radial seal duct technology, which improves energy efficiency.
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