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.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones