Smiths Group revenues to take a hit from new EU medical devices regulation
Engineering firm Smiths Group said this morning that it will take a hit to revenue as a result of new EU regulations on medical devices.
Shares in the company fell 7.8 per cent in early trading following the announcement.
The FTSE 100 group has had to temporarily suspend some of its devices in Europe in advance of rules due to take effect in 2020, as one of its service providers has lost certification for some products.
This combined with the termination of two contracts in the US means the Smiths Medical division will take a two per cent hit to revenue, the company said.
Meanwhile, Smiths reported an update for the 11 months to the end of 30 June, which saw overall revenue rise three per cent on an underlying basis.
Divisions including John Crane, Smiths Detection and Felx-Tek all performed well.
Smiths also indicated that there could be further reshuffling in its portfolio. Earlier this year it confirmed it was in discussions about combining its medical division with ICU Medical. But talks are still ongoing with no certainty that a transaction will be completed.
"We remain confident that over the medium term we will achieve sustainable organic revenue growth above our chosen markets," the firm said in a statement. "In parallel with active portfolio management, we will deliver superior long-term sustainable value."