Bowman's cautious tone fails to impress Smiths Group investors
Philip Bowman failed to impress in his maiden trading statement as the head of Smiths Group as investors sent the engineering conglomerate's shares plummeting on news of continued weakness in its medical division.
Investors had been hoping that Mr Bowman, who took over in December, would use the update to give some indication of his plans for the group. Instead the company gave a cautious outlook for its medical business, where it has been hit with supply chain issues, while its airport scanners business grew slower than expected. Its shares dropped by nearly 6 per cent in midday trading before recovering to close down 1.5 per cent at 933.50p.
"The cautious tone on some of the issues they're having did not go down well," said Richard Johnston, an analyst at Numis Securities. "We had been looking for some sense of strategy going forward, but we did not receive it."
The company said sales and profit growth over the past six months were in line with management expectations, though medical was "flat". The transfer of manufacturing operations to Mexico was completed, but the company warned there were still challenges that needed ironing out. In a statement, the company said: "Whilst the transfers of key production from Hythe and Kirchseeon [in Germany] to plants in lower-cost regions have been completed, the business has been affected by supply chain issues and the implementation of the [enterprise resource planning] system. Management believe it will take a significant period of time to fully implement a world-class supply chain and ERP system."
Break-up speculation that has surrounded the company for years has remained since Mr Bowman was named as the successor to Keith Butler-Wheelhouse. Before taking up the post at Smiths, he sold ScottishPower to the Spanish utility Iberdrola and before that hawked Allied Domecq to Pernod Ricard.
Mr Johnston said that "portions of Smiths would sit well within any number of conglomerates". Talk has often centred on GE, though this decreased after a proposed joint detection business fell apart late last year. The deal to combine the scanning business of the two companies was originally announced when Smiths sold its Aerospace unit to the American conglomerate for £2.5bn last January.
Smiths won a 10-year deal last September to supply all of the airports operated by BAA with X-ray scanners. It will unveil its interim results on 19 March.
- 1 PlayStation and Xbox hacked by Lizard Squad
- 2 Christmas comes early to Hong Kong, as millions of bank notes spill out onto busy street
- 3 The 'Black Museum': After 150 years, public can visit police’s grisly crime museum
- 5 Vagina canoe artist defends herself over ‘obscenity’ charges
PlayStation and Xbox hacked by Lizard Squad
Antonio Martin shooting: Black teenager may have tried to ambush patrolman, says police officer's lawyer
Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
Boxing Day snowfall set to push even more bargain-hunters online for sales
The 'Black Museum': After 150 years, public can visit police’s grisly crime museum
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Alex Salmond has 'broken his word to the Scottish people' says Scottish Lib Dem leader
iJobs Money & Business
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...