Medical woes wipe £500m off Smiths Group’s value

and Wales, but still significant, with drops of 16pc and 13.8pc respectively.

Flats and maisonettes have fallen out of favour, losing nearly 1pc in price. In sharp contrast, detached houses ticked up by 4.7pc in the year to May, with an average asking price of £370,000 in England.

The shift downward for smaller properties was driven by London’s market slowdown, which accounts for close to 30pc of England’s flats and maisonette transactions, according to Land Registry figures.

With weakness building in the market, fears are mounting that a rise in interest rates could have a further chilling effect on transactions.

“The near-term outlook for house prices now hinges on the MPC’S actions at its August meeting,” said Samuel Tombs of Pantheon Macroeconomics.

The expected rate hike’s impact on mortgage costs is likely to “ensure that year-over-year growth in house prices slows to just 1pc” in the last three months of the year, he said. ENGINEERING mini-conglomerate Smiths Group had almost £500m wiped off its market value after warning of problems in its medical division.

In a pre-close trading update, the FTSE 100 company said while it had returned to growth on a group level, the medical business was experiencing troubles. Some of its medical products have been suspended from use because of new EU regulations, an issue which was compounded by the termination of two US contracts.

Investors took flight, with the shares plunging 7pc to £16.27, valuing it at £6.4bn. Smiths said in the 11 months to the end of June, sales were up 3pc on an underlying basis, and that with the exception of the medical unit, it will perform in line with expectations.

The company has five main businesses: John Crane, supplying components for the energy industry; detection, making airport and port security scanners; Interconnect, which produces electronic components; Flextek, which makes hoses used in industry and vehicles; and medical.

Medical is the largest part of Smiths, with sales of £951m last year, almost a third of total revenues. The company said the unit is set to report a 2pc drop in full-year sales. The troubled medical business is the subject of a potential sale to rival ICU Medical. When news of the possible combination emerged in May, it drove up Smiths’ shares to an all-time high of above £18.

Artjom Hatsaturjants, an analyst at Accendo Markets, called the news an “effective profit warning despite a broadly positive update”.

“The market reaction highlights the vagaries of the stock market and how even a single underperforming division can sour investor outlook for the otherwise healthy business,” he added.

“While Smiths Group is trying to reassure investors by pointing to the fact that this is a one-off disruption, regulation is something entirely out of the company’s hands.

“With the post-brexit landscape still unclear for UK businesses, the company’s certainty that it can avoid similar disruptions in the future should be taken with a pinch of salt.”