Smiths Group warns of job cuts as it at­tempts to save £70m a year

The Daily Telegraph - Business - - Business - By Alan Tovey

EN­GI­NEER­ING con­glom­er­ate Smiths Group is to axe hun­dreds jobs across the busi­ness in a re­struc­tur­ing to save £70m a year.

The FTSE 100 com­pany, which has 23,000 staff glob­ally, 1,400 of them in the UK, re­fused to put a num­ber on how many jobs would go.

How­ever, it is un­der­stood that cuts – which it said were not down to coro­n­avirus but part of pre-ex­ist­ing plans – will rep­re­sent a “low sin­gle digit per­cent­age” of staff. This could mean as many as 1,000 jobs will be lost.

The sav­ings, equal to about 3pc of an­nual sales, will leave Smiths with a “flat­ter, leaner, faster struc­ture” said Andy Reynolds Smith, the chief ex­ec­u­tive, who added he “very much re­gret­ted that this will in­volve some jobs losses”.

An­nounced in a trad­ing up­date yes­ter­day, the re­struc­tur­ing will come at a cost of £65m across this and the next fi­nan­cial year, and will de­liver an­nual sav­ings from 2022.

Smiths med­i­cal di­vi­sion – the spin­ning off of which was de­layed by the pan­demic – was called in by the Gov­ern­ment to help with the ef­fort to ramp up pro­duc­tion of ven­ti­la­tors to treat coro­n­avirus pa­tients.

De­mand for its de­vices, such as med­i­cal pumps, and re­stock­ing of sup­plies by hos­pi­tals helped lift the unit’s rev­enues by 1pc in the year to date.

Group-wide rev­enues were 6pc higher in the first 10 months of the fi­nan­cial year. How­ever, sales were only 1pc up on an un­der­ly­ing ba­sis which strips out the im­pact of ac­qui­si­tions and the med­i­cal busi­ness.

Mr Reynolds Smith said the com­pany had been “re­silient” over the past four months of lock­downs, helped by strong or­der back­logs.

But he warned there has been “some slow­ing, due to the im­pact on our op­er­a­tions and those of our cus­tomers”.

All 75 of the com­pany’s man­u­fac­tur­ing plants are op­er­at­ing, but the chief ex­ec­u­tive said mea­sures to pro­tect staff mean the busi­ness is “not im­mune to higher con­se­quen­tial costs”.

Smiths’ John Crane en­gi­neer­ing arm has seen rev­enue ris­ing, de­spite a re­cent slow­down driven by dis­rup­tion to cus­tomer ser­vice.

The de­tec­tion unit which makes scan­ners used at air­ports has con­tin­ued to win new or­ders, but ten­ders and ser­vic­ing rev­enues have dipped.

Smiths also an­nounced that it is buy­ing US-based com­pany PathSen­sors, a biotech­nol­ogy busi­ness.

Shares in Smiths rose about 8pc.

Andy Reynolds Smith, chief ex­ec­u­tive of Smiths, which is ax­ing hun­dreds of jobs

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