(Alliance News) - Smiths Group PLC on Tuesday reported what it considered a robust annual performance, as the engineer raised its dividend and got closer to the sale of its medical unit.
For the financial year ended July 31, revenue was down 5.5% to GBP2.41 billion from GBP2.55 billion the year before. Revenue slightly pipped the market consensus estimate of GBP2.40 billion.
Annual operating profit, adjusted for strategic restructuring programme costs and write-downs, was GBP372 million, up 14% from GBP327 million. The figure beat the consensus forecast for operating profit of GBP357 million.
Pretax profit almost doubled to GBP240 million from GBP133 million, as operating costs were reduced to GBP2.08 billion from GBP2.31 billion year-on-year.
The FTSE 100-listed company said it has completed its restructuring programme, with savings delivered ahead of schedule.
London-based Smiths declared a final payout of 26 pence, taking a total dividend to 37.7p, up 7.7% from 35.0p paid a year ago.
"Smiths has high quality businesses with strong fundamentals and is well positioned in markets with near-term upside and attractive long-term growth drivers," said Chief Executive Paul Keel.
"We are building good momentum and are positioned for growth in our core industrial technology business. Smiths is pointed in the right direction and our focus now is squarely on acceleration - acceleration of delivery, acceleration of growth, and acceleration of value creation," added Keel.
Also on Tuesday, Smiths said it signed a binding agreement with California-based medical technology firm ICU Medical Inc to sell its Smiths Medical business for USD2.7 billion, supplanting a previous USD2.3 billion agreement with private equity firm TA Associates in August.
Minus debt and other liabilities, the deal is worth USD2.4 billion. Upon completion, Smiths expects to receive USD1.85 billion in initial net cash proceeds from the Smiths Medical sale. It said the sale of the medical unit "simplifies and positions Smiths for focused growth in its core industrial technology business" in the future.
Completion is expected in the first half of 2022. Following the sale, Smiths Group plans to return 55% of the proceeds to shareholders through a share buyback, it has said. The reminder will be used for "investment in growth", Smiths said on Tuesday.
Smiths shares were trading 4.0% higher in London on Tuesday at 1,419.00p each, giving it a market capitalisation of GBP5.63 billion. It was the best blue-chip performer in London on Tuesday morning.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Smiths Group (SMIN)