Self help and savings secure improvement at Smiths

Reporting its financial results for the half year to January, the company said that its profit margins had reached new highs as a result of volume leverage, better pricing and a focus on operational improvement and restructuring. Sales had benefited from organic growth and recent acquisitions, despite order delays in the detection machine division and a tougher trading environment and SKU rationalisation holding back Smiths Medical. Chief executive Philip Bowman (pictured) said: "Looking ahead, we are enhancing our focus on top-line growth through increased investment in new product development, improved sales and marketing effectiveness, building our footprint in emerging markets, and targeted acquisitions. At the same time, we remain focused on delivering further savings from our restructuring and other initiatives." During the half year, sales were down 9% and operating profit down 11% at Smiths Detection with performance constrained constrained by variable order flow in military and ports & borders but several new contracts bode well for an improved second half. At the specialist seals subsidiary John Crane, sales up 12% and profit up 18%, reflecting increased volumes and efficiency initiatives. Smiths Medical saw sales down 2% but operating profit up 5% in a tough operating environment where unemployment drives down medical procedure rates down due to unemployment. Across the group, half year revenue reached £1.37bn compared to £1.28bn for the same period last year while pre-tax profit was £189m (£148m).