Smiths Medical slides as CEO brushes off buyout talk

Smiths CEO Philip Bowman

Smiths Medical, the healthcare arm of British giant Smiths Group, watched pricing pressures and the medical device tax erode its sales in fiscal 2013, but the company's CEO said he still wants to keep the medical device business.

The maker of imaging devices, catheters and infusion pumps saw its revenue slip 2% to $1.4 billion for the fiscal year ended July 31, and the unit's operating profit fell 7% to $30.2 million. Flat sales in medical consumables and a decline in pump revenue were to blame for the 2% decline, Smiths said, while a spike in costs and a $6.4 million U.S. medical device tax charge bit into operating profit.

However, despite rumors that Smiths is weighing whether to ditch its medical arm, CEO Philip Bowman told Bloomberg the company has no plans to get out of healthcare.

In the spring, Smiths received what Bowman termed a "nonsolicited approach" for its medical business, an offer rumored to weigh in at more than $4 billion, but, unable to find "a win-win for both parties," Bowman and company set that aside. Now, the company is moving forward with a slimmer medical unit, slashing its manufacturing footprint while investing in R&D and expanding its stake in emerging markets.

And Smiths won't be shy about making acquisitions of its own, Bowman said, keeping an eye out for technologies that dovetail with its existing strengths, allowing it to drive efficiencies in both developed and emerging markets.

On the whole, Smiths Group's revenue grew 2% to roughly $5 billion on the year, and operating profits came in about flat at $894 million.

- read Smiths' results (PDF)
- watch the Bloomberg interview