Smiths Group celebrating 100 years on London Stock Exchange after gaining admission on eve of First World War
Smiths Group is celebrating 100 years on the London Stock Exchange after gaining admission on the eve of the First World War.
The engineer is one of only a handful of companies to celebrate a centenary of uninterrupted listing on the stock market. Antofagasta, the Chilean-based mining group, joined the London market in the 1880s and is still a member of the FTSE 100 index, giving it the longest recorded listing of any company. Barclays bank, which first listed in 1902, is another that can boast a stock market track record lasting more than 100 years.
Smiths was founded in 1851 by Samuel Smith as a family jewellers, in Elephant & Castle, south London, and has grown to become an industrial conglomerate with a market value of nearly £5bn.
Long history: Workers gather outside Smiths' London factory in 1916
At the time of its float, when it was known as S. Smith & Sons (Motor Accessories) it made speedometers and carburettors for early motor vehicles and employed 300 people.
Today it has more than 23,000 staff in 50 countries, working in five divisions including services to the oil and gas industry, medical devices and security sensors.
Its products have played a part in events including the first test-tube baby and conquest of Everest, when Sir Edmund Hillary led the ascent wearing a Smiths De Luxe watch, with a specially created low-temperature lubricant. The centenary celebrations come at a time when chief executive Philip Bowman is eager to move the company to the next phase of its evolution. Bowman, who joined the company in 2007 with a reputation for selling businesses, has made no secret of his desire to slim down the conglomerate by shedding non-core operations.
A bid by private equity group Apax for the medical division in 2011 came to nothing, however, and Bowman’s ambitions to streamline the group have been held in check by asbestos liabilities of £231m and a swollen pension deficit. The retirement shortfall is on the books at £236m, but is estimated by the City at £1bn on a buyout basis.
Having survived two world wars, Smiths also weathered the financial crisis in reasonable shape.
Shares (up 6p to 1230p) have risen by 66 per cent over the past five years, but have lagged the performance of the engineering sector. The latest annual pre-tax profits were flat at £498m.
The group faces headwinds due to the strength of the pound, since only 4 per cent of its business is in the UK and most of its income comes in dollars or euros. Sanctions on Russia could also have an impact, though the group said only a small proportion of its sales are in that country.
Bowman, who opened electronic trading from the balcony of the Stock Exchange yesterday, said the ‘rich industrial heritage’ gave him confidence to tackle the challenges of the 21st century.
‘Everyone is immensely proud to be associated with a company that has not only reached this remarkable milestone but also created so much history as it repeatedly transformed itself to survive and prosper.’
- Engineering support services group Babcock rose 8p to 1108p after a good start to the financial year. Its order book has risen to £13.5bn thanks to recent contract wins and its takeover of helicopter transport firm Avincis, which brought with it orders of £2bn. Babcock said the outlook in the UK and overseas remains positive.
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