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(Alliance News) - Smiths Group PLC on Tuesday said that a strong performance by John Crane had spared its interim results from a semiconductor market hit, as the company also announced the appointment of a new chief executive officer and kicked off a major share buyback programme.
Smiths Group is a London-based engineering company operating in the energy, industrial, security and aerospace sectors.
Revenue for the half-year ended January 31 reached GBP1.51 billion, in line with market expectations and inching up 0.7% from GBP1.50 billion a year prior. Pretax profit rose 2.4% to GBP171 million from GBP167 million.
John Crane, Smiths Group's mechanical sealing subsidiary and the company's largest earner, delivered a revenue increase of 7.1% to GBP555 million from GBP519 million.
However, both its Interconnect and Flex-Tek divisions reported a dip in sales, down 15% to GBP164 million from GBP193 million for the former, and the latter down 2.7% to GBP384 million from GBP395 million.
Smiths said the sharp dip in Interconnect's earnings reflected continued weakness in the semiconductor market. However, the company added that activity levels showed signs of improving in this area, with orders beginning to climb in the second quarter, and "a positive book to bill for the division".
Group statutory operating profit was up 2.7% to GBP192 million at a 16.4% margin from GBP187 million at a 16.1% margin.
Headline earnings before interest, tax, depreciation and amortisation were up 1.8% to GBP289 million from GBP284 million.
Basic earnings per share were 32.0p for the period, up 4.6% from 30.6p in the first half of financial 2023.
Smiths has declared an interim dividend of 13.55p, up 5.0% from 12.9p a year before.
Looking ahead, Smiths reaffirmed its organic, medium-term revenue growth target of 4% to 6%.
Growth is expected to improve in the second half, driven by continued strength in the end markets of aerospace, security and energy, with improving semiconductor trading further on the horizon.
Smith's also announced the appointment of Roland Carter as chief executive officer with immediate effect. Carter replaces Paul Keel, who has taken up a role as chief executive of a "US public company".
Smiths said that Carter, who has led Smiths Detection since 2018 and formerly served as president of Smiths Asia Pacific, possesses "extensive international experience and a deep knowledge of Smiths Group's end markets and industry sectors".
Alongside its interim results, Smiths also unveiled plans to commence a GBP100 million share buyback programme with immediate effect.
The first GBP50 million tranche will run until September, and shares purchased under the programme will be cancelled, Smiths said.
Shares in Smiths Group were up 3.1% at 1,706.00 pence each in London on Tuesday morning.
By Hugh Cameron, Alliance News reporter
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