EVENTS OF MIDAS FALL: Smith’s trick for scanning bags can help your funds fly

You are at the airport, going on vacation. You have to be excited. Instead, you’re looking for a plastic bag with toiletries that you overcrowded the night before. You try to remove the lid from the laptop, while making sure there are no small things in your pockets. And someone behind sighs loudly because you seem to be taking up too much time.

Nowadays, traveling abroad often looks more like an obstacle course than a time for fun. But that may change. The British engineering company Smiths Group has developed an upgraded scanning machine that can check passenger bags as they are, saving time, reducing hassles and increasing safety.

The machines are already in use in Italy and parts of America, they are being tested at Heathrow and are set to be installed at busy airports around the world over the next few years.

Buy Deal: Smiths Group Shares May Grow After It Develops Upgraded Luggage Scanner at Airport

Demand for Smiths shares should also grow. They are now worth £ 14.35 and they have seen some ups and downs, but new CEO Paul Kiel has poured fresh energy into the business and the firm is working in emerging markets such as security, communications and carbon capture.

The Smiths can trace their roots back to 1851, when Samuel Smith opened a jewelry store in South London. By the early 20th century, the company had grown into a high-tech engineering firm, producing some of the first speedometers – including one for King Edward VII’s Mercedes – and developing a specialized aviation kit for the Royal Air Force during both world wars.

This pioneering legacy remains at the heart of the business to this day. The company operates in four main divisions – Smiths Detection, Smiths Interconnect, John Crane and Flex-tek.

The detection business doesn’t just make scanning machines at airports for hand luggage. It also supplies NATO with a chemical protection kit that warns soldiers of harmful substances in the air. And it provides cities with security equipment, from checkpoints to pathogen sensors that can detect whether Covid-19 or other airborne diseases are present. Smiths Interconnect helps improve the performance of cables and satellites. Its kit provides Wi-Fi in flight, improves satellite navigation and even allows Mars Exploration rovers to connect to Earth. Businesses are also testing semiconductors to make sure they are working properly – a huge market that is growing.

Flex-tek produces flexible cables that are mostly used in American homes and on airplanes, and it is growing rapidly.

John Crane is a leading manufacturer of specialized seals that prevent greenhouse gases from escaping from pipes and terminals when oil and gas are in motion. The group is already helping energy companies reduce emissions, but it is also working on new technology to transport cleaner forms of energy such as hydrogen.

Smiths Detection has suffered from travel restrictions related to Covid, but this is already declining, while all other divisions are making good progress, so turnover rose just over 3 percent in the six months to Jan. 31 and profits rose 11 percent.

Kiel is determined to do even better in the future, focusing on annual organic sales growth of 4-6 percent and stable double-digit profit growth.

The company is investing significant sums of money in research and development, but there are always many dividends left for investors, so payments have risen through the pandemic and must continue to do so.

Many businesses are nervous, Vladimir Putin is on the path to war, inflation is rising and the economy is under pressure. Smiths is not immune to these headwinds, but the company is operating in critical markets that need to see demand rise in an uncertain world.

Importantly, Smiths not only designs and manufactures products in each of its divisions, but also maintains them, often earning more money from follow-ups than from initial sales.

Analysts predict a 5 percent increase in turnover to £ 2.5 billion for the year to July this year, profits will grow by 6 percent to £ 394 million and dividends of 40.2 pensions in 2022 compared to 37.7 pensions in the past year.

Smiths also completed the sale of its medical unit in January for more than £ 2 billion.

The business was a long-term hurdle for the group, and Kiel used part of the proceeds to buy back shares, which should lead to higher dividends in the future.

Midas sentence: Smiths is the highest engineering business known worldwide. The group has disappointed in the past, but armed with Kiel’s energy, presence in some of the most important markets around the world and a reputation for cutting-edge technology, the future looks bright. At £ 14.35 the stock is a purchase.

Traded on: The main market Ticker: SMIN Contact: or 020 7004 1600

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EVENTS OF MIDAS FALL: Smith’s trick for scanning bags can help your funds fly

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