Sprawling Smiths Group looks to divest as it refocuses

Fri, 24 Mar 2017 | BUSINESS SALE

Engineering and tech giant Smiths Group could sell off its underperforming businesses as the sprawling conglomerate, which makes everything from medical devices to narcotics sensors, looks to lose some excess baggage.

Speaking to the Times, Smiths’ chief executive Andy Reynolds Smith said the company had “gone through a process of identifying what makes a Smiths business” and had earmarked companies representing 30 per cent of annual group revenue that could be divested.

The company has just published strong financial results for the six months to 31 January 2017, posting an 18 per cent jump in revenue to £1.62 billion, driven by a lower sterling exchange rate.

“We have looked at businesses to see whether they are competitive or can become competitive,” Reynolds Smith was quoted as saying. “We are looking at how long or how hard that could take and if it’s too hard or too long we will look at potentially divesting them.”

Smiths Group has a wide array of businesses and a colourful history, having started off life in 1851 as a jewellery shop in south London before, among other things, adapting a speedometer as a ‘sledge-meter’ for Robert Scott’s epic expedition to the South Pole in 1911 and providing instruments for a World War I bomber used to make the world’s first direct transatlantic flight.

Today the company employs around 22,000 people in more than 50 countries and has five divisions - John Crane, Smiths Medical, Smiths Detection, Smiths Interconnect and Flex-Tek.

Reynolds Smith, who has been chief executive for 18 months, said his review of the business had identified 70 per cent of Smiths’ businesses performing well in their markets.

The chief executive said the company’s growth plans would not be based on acquisitions. “Organic growth is the key for us and we are increasing our R&D spending in innovation,” he said.

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