Smiths Group, the FTSE 100 industrial engineering company, has guided to organic revenue growth of around 4% and a higher operating margin of about 21% for the coming year.
The forecast for the year to July 2027 would lift the headline operating profit margin from 20.6%, taking it to the bottom of the company's medium-term target range of 21% to 23%.
Smiths said it now had "strong conviction" it would reach its medium-term goal of 5% to 7% organic revenue growth more quickly than planned, helped by exposure to data centres and energy security spending.
The guidance accompanied full-year results showing organic revenue growth of 1.2%, or 2.1% on a reported basis, to £1,937 million.
Growth was held back by the conflict in the Middle East, which knocked around £20 million off sales at John Crane, the group's flow control and sealing business.
John Crane grew organic revenue 2.3%, or roughly 4% excluding the Middle East disruption, while Flex-Tek, which makes heating and ducting components, slipped 0.4% as the weak US housing market weighed on demand.
Headline operating profit rose 1.9% on an organic basis to £399 million.
The year was dominated by a portfolio overhaul that saw Smiths sell its Smiths Detection and Smiths Interconnect divisions for a combined £3.3 billion, well above expectations, leaving it a more focused engineering group.
The proceeds pushed Smiths into a net cash position of £1,747 million, from net debt a year earlier.
It also spent £165 million on DRC Heat Transfer, moving Flex-Tek into fast-growing data centre cooling.
Smiths has completed £1.5 billion of share buybacks and has a further £1.5 billion to return, and raised its dividend 5.4% to 48.5p, the 75th consecutive year of payments.
Separately, the company said it would start a process to offload John Crane's legacy US asbestos liability, a step that would remove the provision from its balance sheet and reduce earnings volatility.
Roland Carter, chief executive, said 2026 had been a year of "significant strategic progress" that had repositioned Smiths as a focused, premium industrial engineering company.Smiths Group, the FTSE 100 industrial engineering company, has guided to organic revenue growth of around 4% and a higher operating margin of about 21% for the coming year.
The forecast for the year to July 2027 would lift the headline operating profit margin from 20.6%, taking it to the bottom of the company's medium-term target range of 21% to 23%.
Smiths said it now had "strong conviction" it would reach its medium-term goal of 5% to 7% organic revenue growth more quickly than planned, helped by exposure to data centres and energy security spending.
The guidance accompanied full-year results showing organic revenue growth of 1.2%, or 2.1% on a reported basis, to £1,937 million.
Growth was held back by the conflict in the Middle East, which knocked around £20 million off sales at John Crane, the group's flow control and sealing business.
John Crane grew organic revenue 2.3%, or roughly 4% excluding the Middle East disruption, while Flex-Tek, which makes heating and ducting components, slipped 0.4% as the weak US housing market weighed on demand.
Headline operating profit rose 1.9% on an organic basis to £399 million.
The year was dominated by a portfolio overhaul that saw Smiths sell its Smiths Detection and Smiths Interconnect divisions for a combined £3.3 billion, well above expectations, leaving it a more focused engineering group.
The proceeds pushed Smiths into a net cash position of £1,747 million, from net debt a year earlier.
It also spent £165 million on DRC Heat Transfer, moving Flex-Tek into fast-growing data centre cooling.
Smiths has completed £1.5 billion of share buybacks and has a further £1.5 billion to return, and raised its dividend 5.4% to 48.5p, the 75th consecutive year of payments.
Separately, the company said it would start a process to offload John Crane's legacy US asbestos liability, a step that would remove the provision from its balance sheet and reduce earnings volatility.
Roland Carter, chief executive, said 2026 had been a year of "significant strategic progress" that had repositioned Smiths as a focused, premium industrial engineering company.
