Panmure Gordon kept its 'buy' rating and 3,110p target price on Smiths Group (LSE:SMIN) after the engineering company paired a mixed first-half result with plans to return a further £1.5 billion to shareholders, a sum the broker said amounts to roughly 30% of its market value over the next 18 months.
News of the shareholder payout couldn't cheer investors, however, as the share fell around 9% in Friday's trade.
Smiths reported continuing revenue of £915 million for the first half of 2026, down 1% on a reported basis but up 0.4% organically at constant currency. Underlying EBIT was flat at £181 million, with margin at 19.8%, as a weaker showing at Flex-Tek weighed on the group.
Underlying pre-tax profit fell 6% to £158 million, missing Panmure’s £171 million forecast, though underlying earnings per share rose 11.7% to 62.0p, ahead of consensus expectations. The interim dividend increased 5.4% to 15.0p.
Balance sheet movement was shaped by shareholder distributions, with net debt including leases rising to £843 million from £462 million at the year-end after £320 million of buybacks. Smiths said about £307 million of its ongoing £1 billion repurchase programme has now been completed.