Smiths boosted by airport demand

With many airports reviewing their security arrangements following the attempted terror attack on a US aircraft last December, Smiths said it had seen increased orders for explosive trace equipment from core long-term customers, such as the US Transportation Security Administration.

Many governments and airports are also considering installing body imaging systems and Smiths said its eqo system was being used in a number of trials.

Including its detection business, the company has five divisions and employs 22,000 people. Its medical devices are found in ventilators and drips, while its John Crane business makes mechanical seals for oil and gas companies, as well as industrial and chemicals manufacturers.

Smiths reported pre-tax profits of 435 million for the year to July 31, a rise of 17 per cent on a year earlier after restructuring efforts and cost cutting helped it achieve the company's best margins performance in 10 years.

Sales were four per cent higher at 2.77bn and Smiths predicted that constraints on government spending will continue to affect growth.

Chief executive Philip Bowman said: "We will concentrate on those opportunities within our control to improve performance further and enhance margins."

In Smiths Detection, sales were 15 per cent higher at 574m as operating profits improved to 90m from 63m a year earlier. In the ports and borders market, sales rose 66 per cent following a weak performance last year.

Stronger margins in Smiths Medical following a two-year programme to address overheads and material costs meant profits improved 12 per cent to 184m.

The successful turnaround strategy has fuelled speculation that Smiths could be broken up in order to generate shareholder value. The recent foreign takeover of fellow British engineer Tomkins has also raised City talk that Smiths could be next to attract a bid.