17th Nov 2015 07:41
LONDON (Alliance News) - FTSE 100 engineer Smiths Group PLC on Tuesday said it has a resilient first quarter as the diversity of its operations helped to offset some tough trading in the oil and gas markets, which dragged on revenue in its John Crane energy services business.
The company, which has operations spanning energy services, medical devices and security sensors, said underlying, constant currency revenue declined 4.0% in the first quarter to the end of October, though its group operating margin was broadly flat year-on-year.
John Crane saw first quarter revenue fall in line with expectations, as it continues to contend with tough oil and gas markets. Smiths Medical, the medical devices arm, had a solid quarter, with underlying revenue broadly flat year-on-year.
Smiths Detection, which makes sensors which detect and identify explosives, chemical agents and narcotics, improved profitability in the quarter, supported by recent contract wins and a robust order book, while Smiths Interconnect, which makes connection components for wireless, defence and aerospace industries, and Flex-Tek, which makes components for heating and moving fluids for a range of industries, both had flat quarters year-on-year.
Smith also said it has finalised the valuation of its pension scheme and the change in the actuarial deficit will give its annual cashflow volumes a GBP36.0 million boost.
"Overall, we have made a resilient start to the year. While persistently tough oil and gas end markets have impacted John Crane, we saw good profitability growth in Detection and performance in line with our expectations at Smiths Medical, Interconnect and Flex-Tek," said Smiths Group Chief Executive Andy Reynolds Smith.
"Against a backdrop of challenging conditions in some of our end-markets, our expectations for the full year remain broadly unchanged," Smith added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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