Shares in Smiths Group (LSE: SMIN) lifted 4% in early trade this morning, after the engineering company released its final results for the year ended 31 July 2013.
Revenue increased by 2%, rising to £3.11bn against £3.04bn in the previous year, thanks to strong performances by John Crane, Detection and Flex-Tek, which more than offset declines in Smiths Medical and Smiths Interconnect. Operating profit was also up, by 1% to £560m, following “increased investment in growth drivers”.
Management stated that revenues from emerging markets jumped up 14%, and now accounts for 16% of all group revenue. Chief executive Philip Bowman commented:
“We continued to invest to rebalance revenue and profit streams away from government to commercial customers, and also raise our exposure to faster growing markets. This on-going realignment allowed us to grow revenue, despite a difficult trading environment.
“Our priority is to continue to raise our investment in sales, marketing and new product development to generate medium to long-term value for our shareholders through sustainable growth. We are funding this investment by delivering operational improvements and efficiencies with initiatives underway across all divisions.”
Shareholders will be pleased not only with the 4% lift in the dividend, bringing it up to 39.5p per share, but the Board also recommended a return of cash to shareholders of around £118m, in the form of an additional 30p special dividend, putting Smiths Group on a consensus forecast yield of 3.1%.
