Governments may be tightening the purse strings, but Smiths Group (SMIN) still grew sales across the board. Strip out a heap of one-off costs and operating profit jumped 7 per cent, too, and the benefits of restructuring and more emerging markets work are coming through.
As usual, John Crane stood out. Supplying mechanical seals and bearings to oil companies pushed revenue there up 9 per cent to £973m. Rising volumes, cost-cutting and better pricing pushed margins up, too, driving double-digit profit growth, and the order book bodes well for the next six months. Cut-backs and new products at the medical division offset heavy investment and keener pricing in austerity-obsessed Europe. Pushing products in emerging markets is paying off, too - they now generate 15 per cent of group revenue. Indeed, rising sales to the Middle East and Brazil was one of the reasons behind a rapid recovery at the detection unit during the second half. True, the military is buying less, but demand for X-ray machines from airport and port operators is growing and aftermarket business is rising. Elsewhere, strong demand for high-margin aircraft parts continues to benefit the Flex-Tek hose business.
Broker JPMorgan Cazenove expects adjusted pre-tax profit of £533m in 2013, giving adjusted EPS of 97.15p (from £497m and 92.54p in 2012).
SMITHS (SMIN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,057p | MARKET VALUE: | £4.15bn | |
| TOUCH: | 1,057-1,059p | 12-MONTH HIGH: | 1,119p | LOW: 851p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 16 | |
| NET ASSET VALUE | 248p* | NET DEBT: | 81% | |
| Year to 31 Jul | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 2.32 | 319 | 63.0 | 34.0 |
| 2009 | 2.66 | 371 | 70.8 | 34.0 |
| 2010 | 2.77 | 373 | 75.3 | 34.0 |
| 2011 | 2.84 | 398 | 77.8 | 36.3 |
| 2012 | 3.03 | 366 | 65.4 | 38.0 |
| % change | +7 | -8 | -16 | +5 |
Ex-div: 24 Oct Payment: 23 Nov *Includes intangible assets of £1.7bn, or 437p a share | ||||
