16th Mar 2016 07:33
LONDON (Alliance News) - Engineer Smiths Group PLC on Wednesday said its pretax profit rose in the first half thanks to better operating margins, though its John Crane business continues to suffer amid the tough oil and gas markets.
The diversified engineer, which will be demoted from the FTSE 100 next week, said pretax profit for the six months to the end of July was GBP168.0 million, up from GBP131.0 million a year earlier. Revenue fell to GBP1.37 billion from GBP1.42 billion, but the group's operating margin improved to 13.3% from 11.6%.
John Crane, Smiths' energy services unit, saw revenue fall due to challenging oil and gas markets, though its aftermarket services sales remained relatively resilient. Operating margins for John Crane were lower in the first half, but this was offset by strong performances for Smiths Medical, its medical devices arm, and Smiths Detection, its sensors and detection devices business.
Smiths said it will pay an interim dividend of 13.25 pence per share, up from 13.00p a year earlier.
Andy Reynolds Smith, who took over as Smiths' chief executive in mid-2015, said results for the group will be slightly more weighted to the second half than normal, with energy markets to remain challenging and set to hit John Crane further, but with margin improvement anticipated once more for the Medical unit. Detection, however, will see its margin improvements moderate due to a shift in its revenue mix, he said.
Overall, Reynolds Smith said, Smiths' expectations for the full year remain unchanged.
By Sam Unsted; [email protected]; @SamUAtAlliance
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