21 March 2007

Smiths reports a 7% increase in first half headline EPS for continuing activities

Interim Results 2007

£m

2007

2006

Continuing activities

Headline*

Statutory

Headline*

Statutory

Sales

1,021

 

1,007

Operating profit

148

149

139

136

Pre-tax profit

134

136

125

124

Basic EPS (p)

17.4p

18.6p

16.3p

16.5p

EPS from discontinued activities (p)

 

7.6p

7.1p

Interim dividend (pps)

10.5p

 

9.85p

* In addition to statutory reporting, Smiths Group reports its continuing operations on a headline basis, which shows underlying performance. Headline profit is before exceptional items (incl. impairment of assets), amortisation of acquired intangible assets, profit/loss on disposal and financing gains/losses from currency hedging.

Summary

In the first six months of the 2007 financial year, Smiths Group recorded a 7% increase in the headline earnings per share of its continuing activities, from which the aerospace businesses being sold to General Electric Company (GE) have been excluded. On the same basis, operating profit also increased by 7%, and the net margin improved from 13.8% to 14.5%, with margins in all three continuing businesses moving ahead. This performance was achieved despite the significant impact of a weaker dollar on translation of US earnings into sterling. On a statutory basis, earnings per share of the continuing activities were 18.6p. The operating cash-flow, after capex, was at 84% of operating profit. The Board has declared an interim dividend of 10.5p, an increase of 6.6%. In January, the company announced it would sell Smiths Aerospace to GE for $4.8 billion and would return

2.1 billion to shareholders, together with a share consolidation. It also announced the intention to take a 64% stake in a joint venture which would combine Smiths Detection with GEs Homeland Protection business.

Commenting on the results, Keith Butler-Wheelhouse, Chief Executive said: This is a strong start to the year for Smiths, with the continuing businesses performing well despite the currency headwind. Additionally, we have made good progress on completing the sale of Aerospace and establishing the new Smiths GE Detection business. The outlook for the current financial year and beyond remains encouraging and is in line with management expectations.

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

Interim Results 2007 Press Release(word doc)

A meeting with analysts will be webcast at 9:00am UK time today on www.smiths.com/ir and archived there soon after the event.

ENDS