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The weak pound boosted revenues at FTSE 100 engineering conglomerate Smiths Group in the six months to January, with an 18 per cent jump in the first half of its financial year to £1.6bn.
Underlying revenues were flat compared to the same period last year, but moves to improve focus across the sprawling group meant the company still recorded healthy profit growth. Pre-tax profits more than doubled to £346m on a statutory basis; the company’s preferred measure of “headline” profit, which excludes one-off items, was 31 per cent higher than the same period the previous year.
The company said it expects the weakness of sterling to continue to boost its reported revenues and profits for the rest of the year, though it also increased the value of its foreign-currency debt by £36m.
The company, which began as a manufacturer of watch instruments in 1851, had been seen as a potential target for dismantling after building up a disparate collection of businesses which range from radioactive material detection to medical syringe-making.
Its detection business was the main driver of profit growth in the period, offsetting declines in its other arms.
However, chief executive Andrew Reynolds Smith, who took charge of the company in 2015, has insisted his mandate is to build rather than break down the company, while selling off some smaller non-core businesses.
Mr Smiths reiterated that commitment today, saying:
We have made good progress to focus our portfolio and run our businesses better. Strong cash conversion and improved margins across the group provide us with additional resources to invest for the future. By laying the foundations for organic growth through targeted investments and by taking a disciplined approach to acquisitions and disposals, we are building a bigger, better and more focused Smiths.