Smiths Group PLC (LON:SMIN) saw its shares fall today as, although the engineering firm posted solid growth in its full year reported pre-tax profits and revenue, underlying growth was more constrained seeing a slip in revenue.
In early morning trading, Smiths Group shares topped the FTSE 100 fallers, down 4.7%, or 76p at 1,537p.
For the full year ended July 31, the Smiths Group made pretax profits of £528mln, up 17% year-on-year, while reported operating profit was up 11% to £589mln, although underlying growth was only 3%.
READ: X-ray machines maker Smiths Group sees first-half results beat forecasts
The x-ray machines maker saw its reported revenue rise by 11% year-on-year to £3.280bn, but on an underlying basis there was a 1% decline, with growth across the portfolio offset by market challenges in its John Crane unit’s oil & gas business and a delay in some new product launches in Smiths Medical.
Smiths Group said it delivered margin expansion in all its divisions while making increased investment in R&D and innovation, with its cash conversion rate at 112%.
The firm added that, as in previous years, it expects group performance to be weighted towards the second half, with growth in John Crane's non-oil & gas business, as well as an increase in aftermarket is expected to more than offset the continued challenging market conditions in oil & gas.
Andy Reynolds Smith, the firm’s group chief executive, said: "We are well underway in repositioning the business through organic and inorganic investment with approximately 75% of the Group now well positioned in attractive markets.”
He added: “We're confident that our focus on attractive growth markets, increasing investment in technology and new products, our established operating model for excellence and strong financial framework will deliver long-term sustainable growth and attractive returns."
The firm hiked its interim dividend by 3% to 43.25p, up from the 42.00p paid a year earlier.
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