UK's Smiths Group Rallies Amid Asbestos Liability Divestment Plan, Higher Fiscal 2026 Dividend
Smiths Group (SMIN.L) announced plans to divest its US legacy asbestos liabilities as it delivered a "resilient" fiscal 2026 financial performance amid macroeconomic uncertainty, sending its shares up over 5% in London as of midday Tuesday.In a same-day release, the UK-headquartered engineering group said its John Crane subsidiary will initiate a marketing process for the sale of its US legacy asbestos liabilities. Smiths Group earmarked a provision of 153 million pounds sterling in fiscal 2026 for future defense costs tied to its subsidiary, which is among many co-defendants in a litigation related to legacy products that contained asbestos."If successful, this transaction would remove the asbestos liability from the balance sheet, increase free cashflow and available capital and reduce earnings volatility," the company noted.For the 12 months ended July 31, profit from continuing and discontinued operations totaled 1.97 billion pounds sterling, higher than the year-ago 292 million pounds, as the group made "significant" strategic progress during the full fiscal year. Revenue also increased over the period to 1.94 billion pounds from 1.9 billion pounds.In terms of shareholder returns, the board recommended a final dividend of 0.335 pound per share for the period, up 5.4% year over year, payable Nov. 23 to shareholders on record Oct. 16. This brings the total dividend for fiscal 2026 to 0.485 pound per share, against the 0.460 pound per share a year before.The group said a new share buyback program amounting to 1.5 billion pounds from the proceeds of the sale of Smiths Detection has also now commenced."As we enter FY2027, underlying market conditions remain challenging, but our robust order book and business momentum underpins our expectation of organic revenue growth of ~4% and further increasing our operating margin into our medium-term target range," said Chief Executive Officer Roland Carter.
