(Sharecast News) - Smiths Group said growth got off to a slow start this new financial year due to tough comparative, but reassured investors that it was still on track to hit full-year expectations.
Organic revenue growth was 3.5% in the three months ending October, the global manufacturing and engineering firm said on Thursday, against a particularly strong first quarter of last year when growth was 13.2%.
Nevertheless, this was the tenth consecutive quarter of growth for Smiths and its performance was in line with the board's forecasts.
Full-year organic revenues should still growth within the medium-term target range of 4-6%, with continued margin expansion, the company said.
The John Crane division, which makes rotating equipment solutions for the commodities sectors, saw double-digit organic revenue growth, with strong growth in orders. Smiths Detection, which provides threat detection and screening technologies for the aviation and security markets, delivered high single-digit growth and a record orderbook - helped by two big multi-year defence contract wins.
However, Flex-Tek, the fluids and gases movement specialist, reported a mid-single digit revenue decline due to weakness in the US heating, ventilation and air conditioning market. While the electronic parts business, Interconnect, saw conditions worsen with a double-digit contraction and falling orders.
"Our strong orderbooks in John Crane and Smiths Detection and new product pipeline give us confidence in delivering full year growth within our medium-term target of 4-6%, despite record FY23 comparators, a moderating pricing environment and softer market conditions in parts of Flex-Tek and Smiths Interconnect," said chief executive Paul Keel.
Smiths Group (SMIN)