- Annual organic sales growth ahead of expectations
- Earnings up 17.8%, beating expectations
- Share buyback programme to finish in early 2023
Industrial components company Smiths Group (SMIN) reported full year organic revenues up 3.8% to £2.56 billion, ahead of expectations, sending the shares up 4% to £15.31.
The company said strong order books and leading market positions should support continued momentum while cost inflation was being actively managed.
Smiths, which makes fluid management products, industrial seals, electronic components and security scanners, guided for 4%-to-4.5% organic sales growth and ‘modest’ margin improvement for the year through July 2023.
CEO Paul Keel commented: ‘We delivered growth ahead of expectations, our fastest organic growth in nearly a decade. Along with accelerating growth, we further strengthened our company through increased investments in innovation, commercialisation and supply chain.
‘Still more, we returned £661 million of cash to our shareholders through dividends and share repurchases.’
ACCELERATING GROWTH
The company delivered its fifth consecutive quarter of organic growth in revenues for the year ended 31 July driven by ‘high’ demand across most of its markets and strong order growth of 11%.
Mergers and acquisitions added 1.8% to reported revenue growth of 6.7% while new products launched in the fiscal 2022 year added £51 million to overall revenues.
Reported operating profit increased 12% to £417 million representing a margin of 16.3% compared with 15.5% last year but was 0.8% lower on an organic basis.
Earnings per share grew 17.8% to 69.8p reflecting higher profitability, a lower effective tax rate of 27.6% and the benefit from the ongoing share buyback programme.
The company ended the year with net debt of £150 million representing 0.3 times EBITDA (earnings before interest, taxes, depreciation, and amortisation), down from 1.6 times.
