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Markets News

CORRECTED-UPDATE 1-Engineering firm Smiths' annual profit falls

(Corrects to drop reference of job cuts in headline and clarify job cuts are ongoing in first paragraph)

Sept 24 (Reuters) - Smiths Group reported a lower annual profit on Thursday due to higher costs and a hit from the COVID-19 pandemic, while the British engineering firm also said it was cutting jobs as part of its restructuring plan.

The company, whose baggage screening kit and explosive detectors are a common sight in airports, said annual headline operating profit from continuing operations fell 23% to 327 million pounds ($416 million). Group revenue inched 2% higher for the year ended July.

The company’s shares were down 6% at 1,345.5 pence on London’s blue-chip FTSE 100 index after its full-year profit figure missed Stifel’s estimate of 385 million pounds.

JPMorgan analysts said the results were in line with their model.

Smiths, which did not specify how many employees it was laying off under the programme announced in June, said its plan to separate its medical unit was unchanged. It had delayed a long-sought separation of the business in March to focus on making ventilators.

Through Smiths Medical, the company has been actively involved in efforts to tackle the coronavirus outbreak.

It was making ventilators for Britain under a consortium, and is now supplying syringes and needles for vaccines, while also being involved in developing a COVID-19 antibody test.

The company also proposed an annual dividend of 35 pence per share after delaying its interim payout in March. However, it was 24% lower than last year.

“The strength of performance during the year ... support the proposed total dividend. We remain prudent as we continue to navigate the ongoing uncertainty,” Chief Executive Officer Andy Reynolds Smith said. ($1 = 0.7858 pounds) (Reporting by Pushkala Aripaka in Bengaluru; Editing by Shounak Dasgupta)

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