Charles Stanley downgrades Smiths Group, on mixed outlook and leadership uncertainties

LONDON (ShareCast) - Technology company Smiths Group (Other OTC: SMGKF - news) was downgraded to 'reduce' by analysts at Charles Stanley (LSE: CAY.L - news) , citing a mixed outlook and leadership uncertainties. Despite strong currency headwinds, the group delivered interim results in line with expectations, as revenue declined 2% to £1.41bn, while operating profit fell 5% to £232m.

Pre-tax profit dropped 3% to £208m, while Earnings per share fell 3% to 38.5p, though reiterated full year expectations with underlying performances set to improve in the second half of the year.

The brokerage added that while cost savings programme were on track and new cross-divisional initiative had been launched to boost sales growth over the medium-term, there were "better near-term prospects elsewhere".

Analysts warned of a "mixed divisional outlook" and leadership uncertainties, adding that a strategic business review was likely once a new chief executive and a new chief operating officer were appointed.

On Thursday, Smith shares closed 0.50% up to 1,206.00p