Smiths sees flat headline operating profit

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"With more than half of Smiths' continuing activities based in North America, the decline in the average dollar/sterling exchange rate by 16 cents between 2006 and 2007 will impact reported sales and headline operating profit by some 6 percent," it said in a statement.

"As a result, headline operating profit is expected to be at around the same level as the prior year's 345 million pounds."

Smiths is scheduled to report annual results on September 26.

"Headline profit before tax for the continuing activities is expected to be some 7 percent ahead of the prior year level of 316 million pounds, benefiting from lower interest expense and improved pensions financing," Smiths said.

It forecast its year end net debt at below 600 million pounds.

"Smiths expects to achieve underlying growth from all of its divisions in the new financial year, although reported growth will be held back by the recent further weakness of the U.S. dollar," it said.

For the year just ended, Smiths said its Detection and Specialty Engineering businesses had generated sales and profit growth in line with expectations.

"Sales in Medical have been held back by the operational factors disclosed at the interim stage, although margins have improved," it said.

Smiths said at its interim earnings in March that Medical was facing production constraints while manufacture of some devices was consolidated from Hythe in the UK and Kirchseeon in Germany into other facilities. It also noted capacity limitations in production of safety catheters in the United States.

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