Smiths Group shares were down 1.9% to 1,482.5p in early morning trading on Thursday, after the company announced its fourth quarter of consecutive growth in its Q3 trading update.
The UK engineering firm reported a 4.2% rise in organic revenue from a 3.4% growth in HY1 2022.
However, Smiths Group mentioned a slight decline in some business sales linked to supply chain disruptions and cost inflation reported in its Q3 trading update.
The group commented that its John Crane sector saw modest growth and strong order intake in its Industrials and Energy segments, however, performance was negatively impacted by supply chain issues and elevated input costs, which dented the group’s margins.
The company mentioned that its Smiths Detection segment declined on the challenging Aviation OE market.
Meanwhile, Smiths Group experienced growth in Other Security Systems OE and in aftermath across both sectors, alongside strong growth recorded in Smiths Interconnect driven by positive demand for its products across its end markets.
The engineering group highlighted accelerated growth in its Flek-Tek business over Q3, with demand for Industrials and recovery in its Aerospace sector reportedly in progress.
The company maintained its FY2022 guidance of 3% organic revenue growth, and noted that it is currently on track to deliver a strong comparator in Q4, despite international inflationary challenges and macroeconomic uncertainty across its supply chain.
Smith Group commented that its executive leadership appointments announced on 14 April 2022 were currently in place, with the company reportedly responding well to the new executive shuffle.
The firm added that its £742 million share buyback programme announced on 11 November 2021 was on schedule, with £310 million already repurchased, and the remainder scheduled for delivery in early 2023.
“We delivered our fourth consecutive quarter of growth, demonstrating further progress against our strategy, towards our medium-term target of 4-6% organic revenue growth,” said Smith Group CEO Paul Keel.
“As we enter the final quarter of FY2022, macro uncertainty remains high and supply chain and inflationary challenges continue. We are leveraging the Smiths Excellence System to help manage these headwinds, and confirm our full year organic revenue growth guidance of 3%.”
“We are laser focused on our top priorities of accelerating growth, improving execution and supporting our great people, whose hard work and ingenuity make this progress possible.”