Smiths’ update fails to excite market

Shares in Smiths Group shed 1.4 per cent as the British technology firm’s trading update failed to excite, leading CFD specialist Prime Markets to repeat its “sell” rating on the stock.

By The Newsroom

Published 9th Jun 2011, 09:42 BST

Prime Markets said the interim management statement shows that sales at Smiths Group’s John Crane division fell short of expectations, and while the group has managed to reduce net debt to £797m, down from £880m at its March first-half results, it feels the number is still uncomfortably high.

“There is also little in the way of forward visibility or upside from the current position, so any possible upside could only come from a possible break-up or the selling off of one of the divisions,” said Richard Curr, head of dealing at Prime Markets.

“As CEO Philip Bowman has absolutely ruled out any possibility of this happening, Prime Markets believes general weakness and lack of visibility will drive Smiths Group shares down to November 2010 lows of 1,125p in the coming two to four weeks.”