A 27 per cent increase in the first-half profit of Smiths Group has helped boost its annual forecasts after a 27 per cent increase in the first-half profit due to demand for products on decarbonisation trends and airport upgrades.
The FTSE 100 group makes precision scanners used at airports, venues and borders, as well as valves, connectors and specialist tubing used in the oil and gas, construction and defence sectors, but are also needed for the transition to low-carbon fuels and hydrogen.
The pipeline of projects with exposure to hydrogen, which has a role in the sustainable energy transition, has doubled over the past year, according to Clare Scherrer, the CFO of Smiths Group.
Scherrer told Reuters on Friday that Smith's strong first half and strong outlook are the focus of everyone's thinking about how to invest smartly to enable this transition.
For the 12 months to the end of July, Smiths said it now expects to see organic revenue growth of at least 8 per cent, up from guidance given in January for growth of at least 7 per cent, an improvement from previous guidance.
Organic revenue growth came in at 13.5 per cent in the first half, with the slow down over the coming months due to tough comparables, as well as lower growth in the U.S. construction market and semi-conductors.
The headline operating profit for the first half was 241 million pounds $296 million, a gain of 27 per cent more than the same period last year, ahead of a consensus forecast. Smiths lifted its interim dividend by 5 per cent to 12.9 pence.
Analysts at JP Morgan said the change is real under the management team, and they said they upgraded to forecasts and beat the profit beat. In 2021 Smiths appointed Paul Keel as Chief Executive and he wanted to put the company on the path to sustainable growth.
Shares in Smiths, which have gone up 14 per cent in the last 6 months, outperformed Britain's bluechip index by 1 per cent in early deals.