Smiths shows mixed results

There is good news and bad news for London-based Smiths Group, a large engineering company with a diverse product line, including well thought-of detection solutions for the homeland security market. High-spending oil companies, growing homeland security budgets, and a medical equipment acquisition in the United States helped Smiths Group lift profits by 11 percent in the six months to 31 January. Concerns about the engineering group’s aerospace division, however, pushed the company’s shares down 37p to 949.5p. Analysts note that shares in Smiths have under-performed the FTSE All-share index over the past year — at the same time that peers have seen values rise sharply on resurgent demand for passenger aircraft and higher defense spending.

This underperformance has led to predictions that Smiths may well decide to sell parts of its business or become an acquisition target. Smiths is not alien to selling: It has recouped “1.5bn in the past four years from disposals, including its polymers business and marine engineering unit. Keith Butler-Wheelhouse, the company’s CEO, said the company was not currently considering disposals, but added: “We do like to move in and out of sectors. We are not scared to sell a business.”

-read more in this news release; for the company’s homeland security line, see Smiths Detection Web site