Smiths Group plc (LON:SMIN) has announced its trading statement for the first quarter of FY2021.
Smiths delivered a good trading performance in the first quarter. In a period of ongoing global disruption, the Group continues to demonstrate its resilience, founded on market-leading positions and a high proportion of aftermarket revenues.
Revenue for the three months ended 31 October for Continuing Operations1 was down (2)% on an underlying2 basis. This underpins the Group’s confidence in meeting market expectations for the full year.
· John Crane performed as expected, with challenging market conditions in Energy, partially offset by modest growth in Industrials
· Smiths Detection delivered a strong performance in Aviation during the quarter, driven by delivery of original equipment orders, which was offset by Other Security Systems
· Flex-Tek delivered strong Industrial sales that more than offset Aerospace weakness
· Good momentum continued in Smiths Interconnect
Revenue for the three months ended 31 October for Smiths Medical1 was up 4% on an underlying2 basis driven by further growth in Infusion Systems and Vital Care.
The Group’s strategic restructuring programme is progressing well and will deliver the anticipated £30m of savings in the current year and the full £70m benefit in FY2022.
The Group continues to demonstrate its strong cash generation and cash balances at 31 October had increased to £413m.
On 27 October 2020, the Trustee of the Smiths Industries Pension Scheme secured a further £146.5m bulk annuity buy-in agreement with Canada Life, which insured the benefits of a further c.1,000 pensioners, demonstrating further progress in the de-risking of the Company’s pension liabilities.
1 Continuing Operations exclude Smiths Medical which is accounted for as ‘Discontinued Operations – businesses held for distribution to owners’, given the intended separation of Smiths Medical.
2 Underlying modifies headline performance to exclude the effects of foreign exchange.