- Full-year growth ahead of guidance
- Dividend hiked by 5.1%
- Planned separation on track
Engineering group Smiths (SMIN) reported a strong full-year performance ahead of twice-raised growth guidance and operating profit margin expansion to the top of the range.
The shares jumped as much as 5% in early trading to £25.46, marking a new all-time high, before slipping into negative territory by 10p or 0.4%.
Chief executive Roland Carter commented: ‘This has been another successful year for the group, building on our strong track record of consistent growth and returns.
‘FY2025 has been a pivotal year and the strategic actions we have announced to focus Smiths as a world-class industrial engineering company to unlock significant value and enhance returns to shareholders are well underway.’
EXTENDING TRACK RECORD
Organic revenues grew 8.9% to £3.34 billion, extending the firm’s track record of consecutive years of consistent growth which has averaged 7.4% over the last four years.
Group operating profit was 13.1% ahead of the prior year at £580 million with the margin on sales expanding by 0.6% to 17.4%, the top end of the prior guided range.
‘We exceeded our guidance despite the uncertain macro and tariff environment, a challenging US construction market and interruption from the cyber security incident in January, with the most notable impact being in John Crane’, the company wrote.
Smiths announced a 5.1% increase in the annual dividend to 46p per share, representing the 74th consecutive year of dividend payments and completed £398 million of the announced £500 million share buyback.
POSITIVE OUTLOOK
Looking ahead, Smiths said order book momentum provided confidence in the outlook for fiscal 2026, supporting organic revenue growth expectations of 4% to 6% and continuing margin expansion towards the firm’s medium-term target of 21% to 23%.
The planned separation of Smiths Interconnect and Smiths Detection were said to be progressing well with a formal sales process underway for the former.
A parallel process for a UK demerger and sale is being run in relation to Smiths Detection with an announcement expected before the end of the year.
The company remains committed to returning a ‘large’ portion of the sale proceeds to shareholders.
