Why B&Q-owner Kingfisher can fix your fantasy fund

Thursday September 25

Smiths Group full-year results

This industrial conglomerate ha cancelled its first-half dividend, withdrew earnings guidance and also put the long-awaited spin-off of its Medical division on hold earlier this year. Despite this, shares in Smiths Group have done pretty well, rallying 80pc from March lows. 

July’s trading update also offered some encouragement with underlying sales growth a resilient 1pc. Medical sales were also up 2pc on an underlying basis, as Covid-19 drove critical care demand. Although a pause in non-Covid-related treatments was also noted.

A dividend per share of 26.35p would cost Smiths just over £100m – a cut from last year’s 45.9p total as the board cancelled its 14.1p-a-share interim dividend.

It will be interesting to see whether Smiths feels brave enough to return to the dividend list even if the July trading update made it clear that cash flow had remained strong. It pointed out that Smiths had £300m in cash on its balance sheet and untapped banking facilities for a further £640m, with no major debt repayments due until 2022.

Fantasy Fund Managers should assess the performance of Medical with an eye on the eventual spin-off. Last year it made a post-tax profit of £112m, marginally down from £115m the year before. Any announcement about Medical could be cause for action.

Other news items to watch

Monday September 21: Informa first-half results, Avon Rubber trading update

Tuesday September 22:  IRN-BRU maker AG Barr Trading first-half results, TUI market update, UK Government borrowing figures

Wednesday September 23: Upper Crust and Café Ritazza owner SSP Group trading update

Thursday September 24: Cineworld first-half results, United Utilities trading update

Friday September 25: Pennon trading update

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