Security scares boost Smiths

Business achieved 43% rise in profits

Engineering group Smiths’ detection business achiev-ed a 43% rise in profits after strong demand from airports, ports and border agencies.

With many airports reviewing their security arrangements following the attempted terrorist attack on a US aircraft last December, Smiths said it had seen increased orders for explosive trace equipment from core long-term customers, such as the US Transportation Security Administration.

Many governments and airports are considering installing body imaging systems and Smiths said its “eqo” system was being used in a number of trials.

The company has five divisions and employs 22,000 people. 

Its medical devices are found in ventilators and drips, while its John Crane business makes mechanical seals for oil and gas companies.

Smiths reported pre-tax profits of £435 million for the year to July 31, a rise of 17% year-on-year after restructuring efforts and cost-cutting helped it achieve its best margins in 10 years.

Sales were 4% higher at £2.77 billion but Smiths predicted that constraints on government spending would continue to affect growth.

Chief executive Philip Bowman said: “We will concentrate on those opportunities within our control to improve performance further.”

In Smiths Detection, sales were 15% higher at £574 million as operating profits improved to £90 million from £63 million. 

The successful turnaround strategy has fuelled speculation that Smiths could be broken up to generate shareholder value.