Smiths share price tumbles as group posts revenue drop

Company offloads water bottling business

Smiths share price tumbles as group posts revenue drop

Shares in Smiths Group (LON:SMIN) have fallen into the red in today’s session, as the blue-chip company reported a drop in full-year revenue, pressured by downbeat performance at its Medical unit. The update comes after the FTSE 100 engineering company recently scrapped talks about a potential combination of its Medical business with ICU.

As of 10:23 BST, Smiths’ share price had given up 5.72 percent to 1,500.00p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.83 percent higher at 7,428.53 points. The group’s shares have lost a little over seven percent of their value over the past year, as compared with an over two-percent rise in the Footsie.

Smiths posts revenue drop

Smiths Group announced in a statement this morning that its reported revenue had fallen two percent to £3.2 billion in the financial year ended July 31, while the group’s reported operating profit came in eight percent lower at £544 million.

“With the exception of Smiths Medical, where the second half was disappointing, we delivered a good performance,” Andy Reynolds Smith, the group’s chief executive, commented in the statement, adding that in FY19, the company anticipates “at least sustaining the rate of underlying revenue growth,” with performance expected to be weighted towards the second half, in line with previous years.

Smiths also announced today that it had agreed its  Medical's sterile water bottling business to Amsino Healthcare, for an enterprise value of $40 million.  The deal is expected to complete in the first half of FY2019.

Analysts on Smiths Group

The 13 analysts offering 12-month price targets for Smiths for the Financial Times have a median target of 1,750.00p on the shares, with a high estimate of 2,000.00p and a low estimate of 1,600.00p. As of September 19, the consensus forecast amongst 17 polled investment analysts covering the blue-chip group has it that the company will outperform the market. 

As of 10:41 BST, Friday, 21 September, Smiths Group plc share price is 1,502.00p.

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