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26 September 2006

Preliminary 2006 results (unaudited)

                                                 2006                                          2005
£m                                Headline*   Statutory            Headline*     Statutory
Sales                                3,523                                         3,005
Operating profit                  520                161                       416             382
Pre-tax profit                       492               132                       404            366
Basic EPS (p)                  64.8p              4.3p                     52.8p         48.3p
Annual dividend (pps) 31.35p                                            29.0p

* In addition to statutory reporting, Smiths Group reports on a headline basis, a measure which shows underlying performance.  Headline profit is stated before exceptional items (including impairment of assets), amortisation of acquired intangible assets and financing gains or losses from currency hedging.

In financial year 2006, Smiths Group sales increased by 17%, of which half came from underlying growth.  On a headline basis, operating profit increased by 25%, raising the margin on sales by one percent to 14.8%, pre-tax profit increased by 22% and EPS by 23%.  On the same basis, conversion of operating profit into operating cash was at 81%.  Statutory earnings were reduced by the decision to write down the carrying value of the companys preference shares in TI Automotive Ltd.  Company-funded R&D spend increased by 35% to £193m, reflecting significant investment in new product development which will generate long-term growth.  The Board is recommending the final dividend be raised to 21.5p, bringing the total dividend for the year to 31.35p, an increase of 8.1% - marking 36 years of successive increases.

Commenting on the results, Keith Butler-Wheelhouse, Chief Executive said: Once again, Smiths has achieved double-digit sales growth while improving the profit margin.  We have generated a strong operating cash-flow in 2006 at a time of substantial investment in new product development and in global manufacturing.  The dividend increase is a reflection of the Boards confidence in the outlook for the current year. 

To read the full press release please click on the following link:

Preliminary Results 2006 Press Release (Word Doc)

A meeting with analysts will be webcast at 9:00am UK time today on and archived there soon after the event.  A short interview with the Chief Executive and FD can be seen on the same url or on


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