Smiths Group (LON: SMIN) share price falls after failing engineer expected top line
Engineer Smiths today disappointed investors with weaker-than-expected half-year sales.
Shares slid over eight per cent, making the firm one of London’s biggest listed losers.
Revenue fell four per cent on a reported basis to £1.55bn, one per cent lower on an underlying basis. Analysts had penciled in a top line of £1.59bn
Operating profit slumped 11 per cent to £247m.
The firm’s largest unit, Smith’s Medical was hit a combination of rationalising operations and negative FX movements, meaning revenues fell five per cent to £428m.
John Crane, Smiths’ second largest division saw sales fall two per cent to £428m. But this was against a backdrop of a shake-up at its oil arm, which has been struggling in the wake of staggering oil prices.
Read more: Smiths Group first half profit drops as oil rout bites
Restructuring
Smiths boss Andy Reynolds Smith remained positive, however.
He said: “Smiths Group made an encouraging start to the year as we continued to execute our strategy for sustainable growth.
This year we have commenced our previously announced policy of including restructuring and pension administration costs as part of underlying profit.
“The group’s current trading, the strong order books in John Crane and Smiths Detection, as well as the substantial ongoing programme of new product launches in Smiths Medical, support our confidence that the group’s growth rate will accelerate over the balance of the year. At current rates, foreign exchange will remain a headwind for the full year.
“Over the medium-term, we are confident that we will achieve organic revenue growth above our chosen markets, which in aggregate are growing three to four per cent annually.”
Read more: Smiths takes a tumble after 11pc profit fall