Smiths Group increased its interim dividend and said it was confident about meeting expectations for annual results after profit fell in the first half.
Headline operating profit fell 11% to £166m in the six months to the end of January as revenue declined to £1.15bn from £1.24bn. The FTSE 100 engineer increased its interim dividend by 6% to 11.7p and said trading was improving in the second half.
Headline operating profit fell 20% to £81m at Smiths’ John Crane business, its biggest division. Revenue dropped 14% to £410m as energy businesses hit by plunging oil prices and Covid-19 disruption cut spending. Smiths said John Crane’s orders were improving and the business secured multiple new contracts during the first half.
Revenue fell at all Smiths’ businesses except the interconnect division where income rose to £152m from £140m and headline operating profit almost doubled to £19m.
Chief executive Andy Reynolds Smith said: “This is a robust set of results relative to our end markets, with a resilient top line, good profit conversion and excellent cash generation. Whilst economic uncertainty remains, against the backdrop of our robust first half performance and the improving second half trends, the group is confident of meeting market expectations for the full year and delivering long-term sustainable value.”
