Smiths, which employs around 23,000 people in over 50 countries, reported both a resilient start to the new financial year, along with a material change and improvement in its staff pension funding structure.
The Chief Executive noted that "Overall, we have made a resilient start to the year. While persistently tough oil and gas end markets have impacted John Crane, we saw good profitability growth in Detection and performance in line with our expectations at Smiths Medical, Interconnect and Flex-Tek."
Group revenue declined by 4% compared to the same quarter last year, whilst the company's operating margin had proved to be broadly in line with the same period last year. The Chief Executive went on to note that "Against a backdrop of challenging conditions in some of our end-markets, our expectations for the full year remain broadly unchanged."
In a separate announcement, management also reported a material change in its pension funding structure. The actuarial deficit for the scheme is now £285 million, £250 million lower than the previous triennial valuation in 2012. In total, changes and agreements made will increase Smith Group's free cash flow by £36 million per year. The Chief Financial Officer noted that "I am pleased that we have reached agreement with the Smiths Industries Pension Scheme (SIPS) Trustee on both the level of the deficit and contributions. Increasing free cash flow by £36 million per annum will underpin the Group's ability to invest in attractive opportunities and to continue to grow dividends in line with the long term growth in underlying earnings." The company's share price jumped by over 10% in early UK stock market trading.
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