The FTSE 100 engineering conglomerate, which last week revealed that it was postponing the demerger of its medical arm due to impact of coronavirus, said trading in the three months to the end of March saw disruption only on the Chinese operations of its John Crane and Interconnect businesses.
But the impact of the outbreak is now intensifying, with “generally weaker demand” in all parts of the group except Smiths Medical, with some customers unable to accept deliveries as their premises were closed, reductions in spending in John Crane’s oil and gas markets and Smiths Detection’s airport markets.
Medical has seen a significant increase in demand globally for critical care devices, including ventilators, and Smith is working as part of a consortium to increase the production of its paraPAC plus ventilator for the UK government, with discussions taking place with other governments for similar increases.
Smiths' supply chain is also being affected, though factories and facilities accounting for more than 90% of manufacturing capacity were still open; however, the situation was “changing daily”.
As a result, management withdrew guidance for the full year, saying: “Although we believe that we are in a strong position as we enter this period of high uncertainty, it is too early to assess the full impact of COVID-19.”
Having last week revealed that its balance sheet at its half-year point of 31 January showed net debt of £1.3bn and total available liquidity in excess of £850mln, today Smiths said half-year profits rose 20% to £145mln on revenue up 8% to £1.2bn.