Smiths full-year profit up despite drop in revenue; new CEO appointed

LONDON (ShareCast) - (ShareCast News) - Diversified engineering company Smiths Group (Other OTC: SMGKF - news) posted a 3% rise in full-year pre-tax profit despite a drop in revenue. For the year ended 31 July, pre-tax profit was up 3% from last year at £459m, but revenue slipped 2% to £2.90bn. The company said it saw growth in Smiths Medical and Flex-Tek, but difficult end markets in John Crane, Detection and Interconnect pushed down overall revenues.

Headline earnings per share rose 5% to 86.1p and the board recommended a final dividend of 28p per share, giving a total dividend for the year of 41p, which is a 2% increase from last year.

Chief executive Philip Bowman said: "Looking ahead, our investment initiatives are building a solid foundation to accelerate medium-term revenue growth. We see positive momentum in Smiths Medical, Smiths Detection and Flex-Tek, albeit against the backdrop of continuing global economic uncertainty.

"John Crane is likely to experience further pressures from lower capital expenditure by energy services customers, although the aftermarket services business is expected to prove more resilient. Smiths Interconnect is expected to see modest improvement in some of its commercial markets. Overall, the phasing of group results is expected to be slightly more weighted towards the second half than usual." In a separate statement, the company said that chief executive Bowman will step down at the close of business on 24 September and will remain on garden leave as an employee until the expiry of his notice period on 31 December.

Smiths said Andrew Reynolds Smith has been appointed as an executive director and as chief executive with effect from 25 September.

The company had announced in December of last year that Bowman wanted to resign.