Smiths reorganisation boosts margins

Chief executive Philip Bowman (pictured) said: "Our operational improvement and restructuring programme has delivered enhanced margins across all divisions - reaching a 10-year high. We have also increased investment in new product development to support future growth and ensure that we are well positioned for an economic recovery. Our strategy of targeted acquisitions is underlined by the recent acquisition of Interconnect Devices, Inc., which will strengthen Smiths Interconnect's product portfolio and further increase our presence in China." In the six months ended 30 January sales dipped slightly to £1.28 billion compared with the same period a year before (£1.29bn) while pre-tax profit was 4% up at £148 million (£135m). The company said that its restructuring programme generated savings of £10 million over the period and £27 million to date, procurement initiatives delivered savings of £6 million while company-funded R&D increased by 6% to £43 million. Looking ahead, Bowman said Smiths would continue to drive margin expansion through operational improvement and cost saving initiatives. At the same time, it was investing in the long-term growth drivers through R&D, acquisitions and expansion in faster growing developing markets. The Group was well-positioned to benefit from a recovery, although delivering sales growth was likely to remain challenging in the short to medium term given continued economic uncertainties.