Smiths Group share price falls as first half profit drops as oil rout bites
Smith Group's total profit was dragged down by a drop in its energy services division.
The figures:
Engineer Smiths Group's headline revenue fell three per cent to £1.4bn in the six months ended 31 January, down from £1.4bn a year earlier, but in line with expectations.
The FTSE 100-listed firm's pre-tax profit shrank nine per cent to £189m during this period, down from £208m in the first half of 2014.
It boosted its dividend by two per cent from 13p to 13.25p.
Shares in Smiths Group fell 1.3 per cent to 1,063p this morning.
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Why it's interesting:
Shares fell when Smiths Group named Andrew Reynolds Smith as the replacement for outgoing chief exec Philip Bowman in July.
The company had recently issued a trading update warning that full year revenues are expected to decline, and reiterated that operating profit for 2015 was likely to come in lower than it was last year.
Nevertheless, today's results were largely in line with analysts' expectations.
Its engineering arm, John Crane, was hurt by the turmoil in oil and gas markets, with revenue shrinking 13 per cent to £393m.
But the overall figure was partially cushioned by Smiths Medical and Smiths Detection, where revenue grew by one per cent to £411m and four per cent to £240m respectively.
What Smiths Group said:
"As previously stated, Group performance is anticipated to be slightly more weighted to the second half than usual," Andy Reynolds Smith, chief executive of Smiths Group, said.
"We expect global energy markets to remain challenging in the second half of the year, and are taking action to ensure that John Crane remains well positioned in an uncertain environment."
"Our expectations for the full year remain unchanged."
In short:
While Smiths Group's first half profits fell, this was in line with analyst's expectations.