Highlights
Underlying headline revenue up 6%; growth across all divisions
Headline operating profit 5% higher, margin affected by increased growth investment
Company-funded investment in new product development up 8% to £54m
Emerging market revenue up 9%; representing 15% of Group revenues
Improved headline operating cash conversion at 88%
Dividend up 6%; reflecting strong cash conversion in the period
"Smiths Group has continued to make good progress with underlying revenue growth across all its businesses. Headline margins rose in all divisions except Smiths Medical where, as part of our growth strategy, we have significantly increased our investment in sales and marketing in emerging markets and new product development. We delivered improved cash conversion and return on capital against last year.
"Our priority is driving operational improvements and efficiencies across our businesses while increasing our investment in high growth markets and new product development to accelerate medium-term revenue growth.
"Looking to the second half, we see tough trading conditions as a result of the US medical device tax, slower demand in some parts of John Crane, and the impact of further government budget cuts. However, despite these challenges, there remain significant opportunities to generate value for shareholders over the medium term. We will continue to focus on investing to drive sales growth, and delivering further operational improvements, while maintaining strong cash conversion and improved returns."
