21st Sep 2018 08:24
LONDON (Alliance News) - Smiths Group PLC on Friday said it agreed to sell its Smiths Medical's sterile water bottling business as profit declined sharply in its recently ended financial year.
The stock was down 9.8% on Friday morning at 1,435.00 pence per share, making it the worst performer in FTSE 100 index in London.
The engineering company said Amsino Healthcare USA Inc will acquire its sterile water bottling unit for USD40 million. The transaction is expected to be completed in the first half of 2019.
The disposal is part of Smiths Group's move to concentrate on scalable market leading positions in the company's chosen markets. The proceeds will be reinvested in attractive growth opportunities, it said.
"With a strong portfolio of category leading products trusted by clinicians and patients around the world and with over 20 products launched in the last year, we are confident that our strategy for Smiths Medical will drive market outperformance and world-class competitiveness over the medium term," said Smith Group Chief Executive Andy Smith.
Smiths Group said pretax profit declined by 28% to GBP435 million in the financial year to the end of July compared to GBP601 million reported the year earlier, as revenue slipped by 2.0% to GBP3.21 billion from GBP3.28 billion.
Smiths noted that it gained GBP7 million on business disposal during the year, versus a GBP175 million gain the year before. Headline pretax profit was GBP487 million, down from GBP528 million the year before.
Meanwhile, revenue suffered from unfavourable currency translation rates, with underlying revenue, which excludes the effects of foreign exchange, acquisitions and supplemental sales for divested businesses, up 2% year-on-year.
The company said revenue growth in the John Crane, Flex-Tek and Smiths Detection divisions was partially offset by the weak performance in the Smiths Medical and Smiths Interconnect units.
Smiths recommended a final dividend of 30.75p per share, up from 29.70p paid the year prior. This will bring the total payout to 44.55p, up 3% year-on-year.
Looking forward, the company said it remains confident that it will be able to grow faster than its markets.
"We said that this would be the year we returned to growth, and we've done that," said Smith.
"Our next objective is to deliver continued, sustainable growth, on the way to outperforming our markets."
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