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UPDATE 2-Smiths Group profit up, eyes emerging market growth

Published 03/23/2011, 06:53 AM
Updated 03/23/2011, 06:57 AM

* H1 profit rises 25 pct to 224 mln stg vs 221 mln forecast

* Sales rise 7 pct to 1.37 bln stg, in line with estimates

* Says confident of meeting expectations for full year

* Shares up 2.3 percent, among top FTSE gainers (Adds exec comments, updates share movement)

LONDON, March 23 (Reuters) - British technology firm Smiths Group said it would look to grow full-year sales through a greater focus on emerging markets, after cost cuts helped it to a higher first-half profit.

"To support growth opportunities in emerging markets, we established a direct sales presence in India for both Smiths Detection and Smiths Medical," Chief Executive Philip Bowman said.

"We remain confident of meeting expectations for the full year," he added.

Smiths Medical and Smiths Detection together accounted for nearly half of total company sales in the first half.

The company did not give further details on any possible sale of its medical unit, for which it rejected a 2.45 billion pound bid approach in January. Analysts said the medical unit could fetch a far higher price, but more importantly the spurned bid took the conglomerate closer to a possible break-up.

On a conference call with analysts, Bowman said it "was business at usual at Smiths Medical", and it was the board's "duty" to consider any offers.

Earlier on Wednesday, Smiths reported a pretax profit of 224 million pounds ($367 million) for the six months to Jan. 29, slightly above analysts' consensus estimate of 221 million pounds, according to Thomson Reuters I/B/E/S.

Sales at Smiths, whose products range from airport scanners and bomb detectors to medical devices and fuel hoses, rose 7 percent to 1.37 billion pounds, in line with estimates of 1.36 billion pounds.

The company also increased its dividend by 7 percent to 11.25 pence.

Shares in the company were up 2.3 percent at 1337 pence at 1015 GMT, valuing the business at more than 5.2 billion pounds. ($1=.6108 Pound) (Reporting by Adveith Nair; editing by Rhys Jones and Will Waterman)

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