Smiths Group shares slump after profits fall by £150m

SMITHS Group shares tumbled as the engineering firm reported a 42 per cent slump in profits, due to higher research and development spending and the phasing in of a new detection business.

The company – known for producing security equipment and medical components – said pre-tax profits tumbled from £346 million to £199m on a statutory basis in the year to January 31.

That was against a 4% fall in revenues to £1.5 billion.

It said the engineering firm was hit by exchange rates, four divestments and the purchase of Morpho Detection, which it bought from French firm Safran last year. Its medical division research and development costs also rose.

Smiths Group’s Interconnect business, which “designs solutions” for high speed and secure connectivity for sectors like defence and aerospace, also weighed on results, with reported revenue growth down 41%.

Chief executive Andy Reynolds Smith said it had made an “encouraging” start to the new financial year, but laid bare the weakness felt in certain departments over the previous 12 months.

“As anticipated, Smiths Detection continued to achieve good growth in Air Transportation but this was offset by programme phasing in the non-aviation segments.”

Smiths Group shares tumbled 10% in morning trading.