24 September 2003

Commenting on the results, Keith Butler-Wheelhouse, Chief Executive said:

 "We achieved an increase in operating profit and held earnings close to last year's on a continuing basis, while absorbing the commercial aerospace downturn, the impact of a weaker dollar and higher pension costs. Meanwhile, we have been successfully re-shaping the company to focus on strong, long-term growth opportunities, including establishing Smiths Detection as a separate entity and making sizeable disposals. This marks the 33^rd year of consecutive dividend increases by Smiths Group."

A live audio webcast of the meeting with analysts at 9.00am UK time can be accessed on www.smiths-group.com/prelim2003/, and the meeting can be heard live by dialling in to +44 (0) 20 7019 0810.

Statutory reporting

For the year ended 31 July 2003, Smiths Group recorded consolidated sales of

£3.1 billion, including discontinued activities, compared with £3.2 billion in 2002. 

On a statutory basis, after goodwill amortisation and exceptional charges, operating profit was £380m (2002: £334m), pre-tax profit was £217m (£277m), including

non-operational exceptional charges of £123m (£24m) relating to disposals. Consolidated earnings per share on this basis were 20.0p (33.3p). Retirement benefits are now reported under FRS 17 and the prior year has been restated.

Before goodwill amortisation and exceptionals, pre-tax profit was £384m (£396m) and earnings per share were 50.1p, including 4.5p per share from discontinued activities, compared with 51.0p a year earlier. The Board is recommending a final dividend of 17.25p, bringing the total for the year to 26.0p, an increase of 2%.

Continuing activities, before goodwill amortisation and exceptionals

During 2003, Smiths Group made significant progress in refocusing on markets offering the best potential for long-term growth, with over 70% of profits coming from detection, medical and aerospace activities. At the same time, the company delivered a consistent year-on-year performance despite a sharp slowdown in the commercial aerospace sector. Turnover from continuing activities of £2.6 billion was similar to a year earlier. Oper