Smiths Group cools growth expectations

29th Sep 2010 07:03

Smiths Group has ramped up full-year headline profit by 17% and is delivering on its cost savings ahead of plan, but the diversified high-tech group warns that growth in both sales and profit will be slower this year.Headline profit before tax, which strips out all sorts of one off items, jumped to £435m in the year ended 31 July, up from £371m in 2009. Statutory pre-tax profit rose £2m to £373m.Sales were up 4% at £2.77bn, but down 2% excluding the impact of currency moves and acquisitions. A drop in revenue at John Crane, Flex-Tek, Smiths Interconnect and Smiths Medical was to blame.Cost saving ideas improved margins across the business. The two-year restructuring programme saved £24m this time, making it £41m to date, while procurement initiatives saved £11m.But 2011 is not expected to be easy. "The economic environment remains uncertain and delivering sales growth in the short to medium term is likely to remain challenging," said the group, which also forecasts a "more muted" effect on profit growth from the restructuring and site rationalisation programmes. "The uncertain economic outlook and constraints on government spending will continue to affect sales growth," adds boss Philip Bowman.An unchanged final dividend of 23.5p per share makes a total dividend for the year of 34p.