26th Mar 2021 09:11
(Alliance News) - Smiths Group PLC on Friday raised its dividend after what it called a "robust" performance in the first half, despite market disruptions caused by the coronavirus pandemic, and said it is making progress on the listing of its Medical division.
Shares in the FTSE 100-listed engineering firm were 5.0% higher on Friday morning - one of the best performers in the blue-chip index - at 1,531.50 pence each.
For the half year to January 31, revenue was down 7.3% to GBP1.15 billion from GBP1.24 billion the year before, but pretax profit jumped by 83% to GBP84 million from GBP46 million.
Operating costs fell slightly to GBP1.00 billion.
Smiths Group raised its interim dividend 6.4% to 11.7 pence from 11.0p prior. The increased payout, the company said, reflects its confidence in the medium and longer term prospects.
Chief Executive Andy Reynolds said: "This is a robust set of results relative to our end markets, with a resilient top line, good profit conversion and excellent cash generation. We have continued to position Smiths in the very best way - strategically, operationally, and financially - to enable us to take full advantage of market recovery when it comes."
Looking ahead, Smiths said there were signs of improving trends in the second half, and it is confident of meeting market expectations for the full year. The company is undertaking a strategic restructuring programme with a goal to deliver operating margins of 18% to 20%.
"The accelerating global trends of sustainability and digitisation play to the core strengths and capabilities of Smiths' existing business model. We continue to enhance the positioning of the group for outperformance through targeted investment in innovation and disciplined transactions - including the planned separation of Smiths Medical by the end of 2021, which will focus and simplify the group and maximise value for all stakeholders," Reynolds added.
The boss noted he is confident the company will meet market expectations for the full year and deliver long-term sustainable value.
By Paul McGowan; [email protected]
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