Difficulties detected at Smiths

Designing sensors to identify explosives and drugs continues to be a tricky market for Smiths' detection unit. Pricing pressures pushed adjusted operating profit down by 14 per cent in the first half. Demand for expensive, high-tech radars is still nowhere near post 9/11 levels, although management note that recent wins, such as the $125m (£85m) Abu Dhabi airport contract, have boosted the order book.

The interconnect division, which produces electrical components for wireless telecoms, aerospace and rail customers, also suffered. Delays in customer spending contributed to a 5 per cent slump in adjusted sales.

More positively, after years of stagnation caused by budget constraints in US healthcare, Smiths Medical delivered revenue and profit growth. The improvement mainly came courtesy of tight cost control, investment in infusion pumps and a better year for disposables.

Consistent performer John Crane also shrugged off concerns about the low oil price with a 1 per cent increase in underlying sales. A focus on less vulnerable aftermarket services was enough to offset troubled upstream oil markets on this occasion - although management did warn of future project delays.

In response to the difficult trading conditions across most of its markets, chief executive Philip Bowman - who is retiring at the end of the calendar year - is confident that Smiths' newly unveiled 'Engineered for Growth' programme will deliver. The strategy is centred on investing in sales and marketing, bringing better-quality products to market more quickly, and increasing the group's presence in China.

Broker Numis Securities slashed its forecast for full-year adjusted pre-tax profit by 6 per cent to £440m, giving adjusted EPS of 80.8p (from £429m and 78.9p in 2013).