Smiths Group’s turnover exceeds £3 billion thanks to demand for energy efficiency
- The engineering firm revealed a record 11.6% increase in total organic revenue
- Growth was observed in all of the group’s end markets, especially in the energy sector
Smiths Group achieved a performance that exceeded expectations last year as turnover passed the £3 billion mark and operating profit more than tripled.
The engineering firm reported a record 11.6 percent increase in organic sales for the 12 months ending in July, while also benefiting from £146 million of positive currency movements.
There was growth in all end markets, but the performance of the energy market stood out, driven by huge demand for energy efficiency and emissions reduction products from the John Crane business.
Certain results: Smiths Group was helped by continued strong demand for airport baggage scanners, with sales of its CTIX machines exceeding 1,000 in the period
Contracts won by the division included a contract to supply compressor seals to a European customer and another contract for a large offshore carbon capture and storage facility in Malaysia.
Smiths was also helped by continued strong demand for baggage scanners at airports, with sales of its CTIX machines exceeding 1,000 in the period.
As a result, annual sales grew 18.3 percent to £3.04 billion, and operating profit rose 244.4 percent to £403 million.
Annual statutory profit after tax was more than three-quarters lower than the previous year at £232 million, due to the sale of its hospital equipment business to ICU Medical for around £1.9 billion.
Smiths has spent most of the proceeds from the sale on a major share buyback plan, which has now been completed.
Paul Keel, the company’s CEO, praised “another year of strong progress in fiscal 2023, as we further accelerated our growth, sharpened our execution and developed our talented people.”
He added: ‘We delivered year-on-year improvements across all five of our medium-term financial commitments, including record organic revenue and earnings per share growth.’
In line with its medium-term objectives, the London-based group expects a further increase in organic sales of 4 to 6 percent for the 2024 financial year.
Sales are expected to be weighted in the second half of the period, supported by healthy order books in the John Crane and Smiths Detection segments.
Mark Crouch, analyst at eToro, said: ‘Looking ahead, while the economic outlook appears challenging, Smiths has proven adept at delivering medium-term revenue and profitability targets.
“As the company continues to benefit from the shift to decarbonization, we believe it can continue to do so.”
The company traces its origins to a shop founded by Samuel Smith in Elephant and Castle, South London, which sold jewellery, clocks and precision instruments.
Last month, an Indian spacecraft successfully landed on the moon’s south pole using components manufactured by Smiths.
Smiths Group shares were 1.1 per cent lower at 1,648.5p on Tuesday afternoon, although they have still grown by around 7 per cent since the start of the year.