Smiths Group PLC (LON:SMIN)

QUOTE AND NEWS
Benzinga  11 hrs ago  Comment 
Smiths Group PLC (OTC: SMGZY) reported a drop in its full-year profit. Smiths Group posted a full-year net profit of 232.8 million pounds ($377.8 million), versus a year-ago profit of GBP315 million. Earnings per share declined to 58.4 pence,...
newratings.com  12 hrs ago  Comment 
newratings.com  Aug 15  Comment 
LONDON (dpa-AFX) - Smiths Group plc (SMIN.L) announced that Sarah Cameron will step down as company Secretary with effect from 1 October in order to take up a new role as Director of Governance and Compliance for Peabody, the London-based housing...
Forbes  Jul 15  Comment 
Comparing units outstanding versus one week ago at the coverage universe of ETFs at ETF Channel, the biggest inflow was seen in the Technology Select Sector SPDR Fund (XLK), which added 3,600,000 units, or a 1.1% increase week over week.  Among...
newratings.com  May 23  Comment 
LONDON (dpa-AFX) - Technology firm Smiths Group Plc (SMIN.L, SMGZY.PK) Friday said its underlying revenue for the nine months ended May 3, 2014 was slightly weaker than last year, as growth in John Crane and Flex-Tek was more than offset by...
newratings.com  Apr 2  Comment 
LONDON (dpa-AFX) - Technology firm Smiths Group Plc (SMIN.L, SMGZY.PK) Wednesday said it has appointed Silvio Bracone as Group Strategy Director, effective immediately. Bracone succeeds Mark Reckitt, who is leaving to focus on his expanding...
Benzinga  Mar 19  Comment 
Smiths Group PLC (OTC: SMGZY) reported a drop in its profit in the first half of its fiscal year. Smiths Group's pretax profit for the period fell to 132 million pounds ($219.3 million), from a year-ago profit of GBP166 million. Its revenue...
Benzinga  Mar 6  Comment 
For all of January and most of February, ETFs tracking India were delivering performances that could only be characterized as stellar. Two of the ringleaders of the India ETF rally this year have been rival funds, the Market Vectors India...
MarketWatch  Jun 8  Comment 
Engineering company Smiths Group PLC on Wednesday said it delivered growth in sales, headline operating profit and margin improvement in the 10 months to May 28. Underlying sales were ahead of last year, driven primarily by growth in its...




 

Smiths Group PLC is a global technology company headquartered in London and listed on the London Stock Exchange. The company is organized into five segments: Smiths Detection designs and manufactures sensors that detect and identify explosives, narcotics, weapons, chemical agents, biohazards and contraband; John Crane is a segment that provides mechanical seals, seal support systems, engineered bearings, power transmission couplings and specialist filtration systems; Smiths Medical, provides medication delivery systems, vital care products and safety devices that prevent needle-stick injuries and reduce cross-infection; Smiths Interconnect, builds specialized electronic and radio frequency components and sub-systems that connect, protect and control critical systems, and Flex-Tek, which engineers components that heat and move fluids and gases, flexible hosing and rigid tubing.[1]

Business Growth

With the exception of Smiths Detection, the company's segments are correlated with overall global economic health. Due to the recovery from the recession between 2008 and 2010, the company has seen improvements in its revenue and net income.[1] Smiths Detection has not seen any improvements due to continued delays to orders despite all-time high demands from the airport security business.[2] Smiths Detection, which makes up around 20% of the company's revenues, is highly dependent on the demand from the security industry. The global presence of the company serves as a hedge against bad economic times in certain countries, but also increases risk due to changes in currency values.

Key Trends and Forces

Counter-Terrorism and Defense Spending

The threat of terrorism jumped to the forefront of American foreign policy and defense spending after September 11, 2001. Since that time, defense spending has increased nearly $200 billion in order to pursue wars in Afghanistan and Iraq, but also to secure the US borders and ensure the safety of air travel and international shipping.[3] SMIN's products are sold to governments and government contractors around the world to assist in the noninvasive X-ray screening of cargo, travelers, and vehicles. The company is highly exposed to the forces that govern government spending and any decreased allocations for port, air cargo, or other shipping security would pose a significant challenge to Smiths Group's continued success.[4]

Large Amounts of International Business Expose the Company to Political and Currency Risks

The U.S provides nearly 50% of all of the company's revenues.[1] The remaining 50% is distributed among more than 30 countries in a diversified manner.[1] With the exception of the U.S, no other country generates more than 5% of the company's total revenue. Business is conducted in a variety of global currencies, and changes in currency values are a risk to revenue. The devaluation of the US dollar versus other currencies makes doing business in other countries more expensive in US dollars, but also made revenue abroad worth more in US dollars. Because SMIN makes the majority of its revenues from the US, a increase in the value of the dollar raises revenues when measured against the company's home currency of the british pound.

Competition

Since Smiths is a diversified technology firm, different divisions in the company face different competitors. In addition, the competitors do not offer very similar products, improving the competitive background of Smiths' industries.

References

  1. 1.0 1.1 1.2 1.3 Morningstar Global Documents: SMIN 2010 Annual Report
  2. Reuters: Smiths Detection sceond half falls short
  3. US Defense Spending and Budget: The Mismatch Between Spending and Resources, Heritage Foundation, 6/7/10
  4. When is a Spike in Terrorism Good News?, Motley Fool, 11/10/10
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