(Alliance News) - Smiths Group PLC on Monday posted a 48% year-on-year drop in first half pretax profit and said that Covid-19 disruption was "accelerating", with impact on both demand and supply in the near-term.
The engineering business also said it is withdrawing forward guidance for the year ending in July as it is "too early to assess the full impact of Covid-19".
On Tuesday last week, Smiths had said it won't pay an interim dividend due to weak demand as a result of the Covid-19 health crisis. It also had halted the separation of Smiths Medical from the rest of the group.
Shares in Smiths Group were down 1.9% at 1,040.15 pence each in London, while the overall FTSE 100 index was up 1.7%.
The FTSE 100-listed company on Monday said it is now seeing generally weaker demand - with the exception of in its Medical business - due to contract delays, lower oil prices and airport closures.
Smiths Medical is seeing significant demand for critical care devices including ventilators. The unit is contracting with the UK government and is in discussion with other governments around the world for a significant ramp-up in production of its paraPAC plus ventilator.
Smiths Group also reported increasing disruption to its supply chain and to production and said that it is working with operating units and suppliers to identify and resolve issues.
For the six months to January 31, Smiths recorded pretax profit of GBP46 million, down sharply from GBP89 million a year ago. The drop was attributed to a doubling in exceptional costs to GBP114 million from GBP57 million.
Stripping out these exceptional costs, pretax profit rose 10% year-on-year to GBP160 million from GBP146 million.
First half revenue increased 8% to GBP1.24 billion from GBP1.14 billion. John Crane, Smiths Detection and Flex-Tek delivered good performances, whilst Smiths Interconnect was impacted by previously reported market weakness, the company said, adding that the United Flexible acquisition added a further 5% to revenue growth.
By Tapan Panchal; tapanpanchal@alliancenews.com
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Smiths Group (SMIN)