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Smiths Group unveils restructuring plans, 'some job losses' expected

Organic revenue growth was 1% for the four months to May 31

Smiths Group -
Smiths Detection has seen a slowing in tender activity and service revenues

Smiths Group PLC (LON:SMIN) said there will be “some job losses” as it announced a strategic restructuring programme with the aim of cutting cutting £70mln costs per year from 2022 onwards.

The FTSE 100 group said the plans “will ensure it emerges stronger from the crisis and better able to deliver consistent outperformance” and support its target of achieving operating profit margins of 18-20%.

The programme will be applied across the group and cost roughly £65mln spread across this financial year and the next, with the savings to substantially offset costs in the next financial year.

Smiths, which said it was currently operating in all of its 75 manufacturing plants but that costs have risen due to coronavirus, reported a 1% rise in underlying revenue for the four months to May 31. This means sales were up 2% for the first ten months of its financial year.

On a reported basis, revenues are up 6% for the year to date, including 3% from the addition of United Flexible to its Flex-Tek division in 2018.

“There has been some slowing, due to the impact [of COVID-19] on our operations and those of our customers; we also face increasingly tough comparators through the end of the fiscal year,” the company said in a statement to the market on Tuesday.

Quick facts: Smiths Group

Price: 1458.5 GBX

LSE:SMIN
Market: LSE
Market Cap: £5.78 billion
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