UK's Smiths Group expects slower revenue growth on Middle East war impact (updated)

Smiths

21/05/2026 07:31

Smiths Group cuts annual organic revenue growth forecast to 2% from previous 3% to 4%

John Crane unit's revenue sees £10 million hit, resulting in flat third-quarter group organic sales though order book grows

CFO does not expect 'sharp bounce back' in Middle East sales

Shares up 0.6%, outperforming flat FTSE 100

Updates with details on disruption from analyst call in paragraph 2,5,7, updates share move

By Ankita Bora

May 21 (Reuters) - Britain’s Smiths Group SMIN.L cut its annual revenue forecast on Thursday and warned of a slow recovery for its Middle East business as the Iran conflict disrupted shipments and deliveries to customers in the region.

Smiths could not fulfil some existing orders and customers were unable to accept deliveries or place new orders at normal levels, CFO Julian Fagge told analysts.

The conflict hit Smiths' John Crane unit, which supplies components to a range of industries including oil and gas, causing a £10 million hit in the quarter and contributing to flat group organic revenue in the three months ended May 2.

Iran effectively closed a key transit route through the Strait of Hormuz in response to U.S. and Israeli attacks that started the war on February 28.

"We have 10 facilities in the region and all of those facilities are significantly impacted by events (in the Middle East)," said Fagge.

Smiths now expects annual organic revenue growth of around 2%, down from an earlier forecast of 3% to 4%, assuming continued disruption to its Middle East sales, which account for 7% of total sales.

SLOW RECOVERY AHEAD

Fagge said the company anticipates a similar impact on its John Crane business in its fourth quarter ending July. He cautioned that any recovery would take time, with no “sharp bounce back.”

The company's shares were nevertheless up 0.6% at 1037 GMT, outperforming the FTSE 100 after the group maintained its annual profit outlook. It expects a headline operating profit margin slightly above the 20% it guided towards earlier, supported by its cost‑cutting efforts.

The FTSE 100 company has been reshaping its portfolio through the sale of Smiths Interconnect and the planned divestment of Smiths Detection under its Acceleration Plan.

($1 = 0.7445 pounds)

 (Reporting by Prerna Bedi and Ankita Bora in Bengaluru; Editing by Sonia Cheema, Elaine Hardcastle)

 ((Prerna.Bedi@thomsonreuters.com; +91 98052 24616;))