Smiths Group plans breakup in response to activist investor call

(Sharecast News) - Engineering business Smiths Group on Friday said it was selling its electronic connectors unit and would demerge or offload the detection operation as part of a strategic review that includes extending its share buyback to £500m. The breakup of the group is part of a plan "unlock significant value and enhance returns to shareholders" after US activist investor Engine Capital earlier this month said Smiths should explore a split.

"Capitalising on our strong financial and operational momentum, we will now simplify the group to focus on high performance industrial technologies for efficient flow and heat management," Smiths said.

"These technologies are delivered by our world-class John Crane and Flex-Tek businesses, which serve attractive energy and industrial end markets and are set to deliver continued growth and margin expansion."

It added that the recent cyber attack was limited to internal enterprise systems, and it had "made good progress in the recovery of these, with most critical systems being back online".

"As a result of the immediate, proactive measures that we took, we have been able to minimise the impact on our operations," it said.

"In terms of financial impact, our guidance for the full year is unchanged noting that, given the proximity of the incident to our half year close, we anticipate a portion of the revenue from the last week of January will shift into the second half of the financial year."

Reporting by Frank Prenesti for Sharecast.com