2nd Aug 2005 07:01
Smiths Group PLC02 August 2005 News ReleaseLondon, Tuesday 2 August 2005For immediate release Year-End Trading Statement Smiths Group will announce its preliminary results for the year ended 31 July,2005, on Thursday, 22 September. At the start of its close period the companyis issuing the following trading update, based on estimates and subject toadjustment. As forecast at the time of the interim results, the strong sales and profitgrowth momentum seen in the first six months has been sustained through the fullyear. Sales have increased by 11%, and headline* operating profit is expected to beapproximately 16% ahead of the prior year, reflecting a half percent net marginimprovement. All four divisions are expected to have achieved double-digitimprovements in operating profit. This divisional performance has beenachieved despite a currency translation impact of approximately £11m causedprimarily by the weaker dollar, and a higher level of investment in R&D. Inaddition to good organic growth, recent acquisitions have made a valuablecontribution, and their integration is proceeding well. The company expects to report an increase in pre-tax profit of around 17%,resulting in headline* earnings per share in line with the market consensus of54p, compared with 45.9p in 2004. Net debt at the year-end will be in the region of £950m, principally due torecent acquisitions. Increased capital expenditure and a higher level ofworking capital is expected to result in a lower than normal conversion ofoperating profit into cash. Exceptional charges are likely to be in the regionof £50m, comprising the second year of the restructuring programme commenced in2004, the initial phase of Medex integration and the settlement of thelitigation involving the Cozmo diabetes pump. Following publication of the 2005 Accounts, the results will be restated underInternational Financial Reporting Standards (IFRS), to allow easier comparisonwith the years ahead. As indicated in July, had IFRS been adopted for 2005, theeffect would have been to increase pre-tax profit by about 6% compared with thecurrent UK GAAP basis. For the new financial year to July 2006, the companywill publish its results using IFRS. The company is confident of the prospects for growth in 2006. In the sectorsimportant to Smiths, the market outlook remains positive. Additionally, recentacquisitions are yielding synergy benefits, increased investment in productdevelopment is paying off, and the continuous productivity drive will enhanceprofitability. - o - * "Headline" profits and earnings per share are before exceptional charges and amortisation of goodwill. The company will hold a conference call for analysts and investors at 2.00pmtoday, London time. The call can be accessed on: UK toll free number: 0800 018 0764 US toll free number: 1-877 951 7311Passcode: Year-End Leader: Russell Plumley From 4.00pm, a recording of the call can be heard on: UK toll free number: 0800 376 9053 US toll free number: 1-866 851 5334 Media: Investors:Chris Fox Russell Plumley+44 (0) 20 8457 8403 +44 (0) 20 8457 [email protected] [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Smiths Group