Corporate housekeeping dominated the morning's news, with Smiths Group closing out a multi-billion-pound divestment programme and three UK-listed groups, SThree, Kingfisher and Oxford Biomedica, all lifting or reiterating guidance on improving underlying trends. Smaller deal activity rounded out the session's agenda, from a reseller tie-up at PCI-Pal to disposals at Rentokil Initial and an aluminium recycling investment at Metlen.
Smiths Group nets £3.3bn from portfolio overhaul
Smiths Group (LSE:SMIN) has completed a strategic reshaping of its business, reporting organic revenue growth of 1.2% for the year ended 31 July alongside an expanded headline operating profit margin of 20.6%. The FTSE 250 industrial engineer divested Smiths Interconnect and Smiths Detection for a combined enterprise value of £3.3bn, with the group saying both disposals landed at valuations ahead of market expectations, 15.1 times and 12.5 times FY2025 EBITDA respectively.
Headline operating profit rose 1.9% organically to £399m, with return on invested capital at 23.5% and operating cash conversion of 96%. Net cash stood at £1,747m, bolstered by pension fund transactions. John Crane, the group's seals business, grew organic revenue 2.3% despite absorbing roughly £20m of disruption from the conflict in the Middle East, underlying growth ran closer to 4% excluding that impact. Flex-Tek's organic revenue slipped 0.4% as robust aerospace demand was offset by weaker US residential construction and thermal solutions sales; Smiths acquired DRC Heat Transfer for £165m to push Flex-Tek into data centre cooling, while agreeing to sell three Flex-Tek industrial businesses for £40m. The group also completed a £1.5bn share buyback, with a further £1.5bn earmarked for shareholder returns, and has launched a process to divest the John Crane US legacy asbestos liability.
"We are delivering significant value today while creating a clear pathway to substantial long-term value creation and sizeable returns for shareholders," said Roland Carter, chief executive of Smiths Group.
The scale of the Interconnect and Detection exits, both struck ahead of expectations, gives Smiths a materially cleaner and more concentrated portfolio heading into FY2027, for which it has guided to organic revenue growth of approximately 4% and a margin near 21%. With the asbestos liability process now underway alongside the DRC Heat Transfer deal, management is signalling that the era of complex conglomerate structure is giving way to a tighter, higher-margin industrial platform built roughly John Crane and Flex-Tek.
SThree lifts profit guidance as trading improves
Sthree (LSE:STEM), the global STEM workforce consultancy, now expects profit before tax for the year to 30 November of at least £12m, up from the approximately £10m guided in mid-September 2025. Group net fees fell 2% year-on-year in the third quarter, a further improvement on declines of 6% in the second quarter and 8% in the first, with contract net fees, 84% of the total, down just 1% against an 8% fall in permanent fees.
The company attributed the upgrade primarily to working capital efficiencies and one-off benefits it does not expect to recur. The contractor order book grew 5% year-on-year to £148m, giving roughly five months of forward net fee visibility, while net cash stood at £36m at 31 August, down from £42m a year earlier. SThree has bought back £10.5m of shares under its £20m buyback launched in February. "We are seeing encouraging signs of stabilisation, supported by growth in the USA and moderating declines in several markets," said Timo Lehne, chief executive.
The sequential narrowing of net fee declines across three straight quarters points to a business finding a floor after a prolonged downturn, though management's own framing of the upgrade as partly one-off tempers how much of the improvement is structural versus timing-related.
Kingfisher lifts profit guidance on strong first-half performance
Kingfisher (LSE:KGF), owner of B&Q, Screwfix, Castorama and Brico Dépôt, raised full-year guidance after adjusted pre-tax profit rose 9.9% to £404m in the six months to 31 July. The home improvement retailer now expects adjusted pre-tax profit of £595m to £635m for the year, up from a prior £565m-£625m range, with free cash flow guidance also lifted to £480m-£520m.
Total sales including marketplace gross merchandise value rose 1.6%, with like-for-like sales up 0.3% on higher customer transactions. Screwfix led the group with like-for-like growth of 5.6% and market share gains, complemented by progress in Poland and Spain, while Brico Dépôt France lagged as heatwaves hit its category mix; Castorama France and B&Q held share. Trade sales excluding Screwfix grew 16%, lifting trade penetration to 31% of group sales, and e-commerce sales excluding Screwfix also rose 16%, taking e-commerce penetration to 22%. "We delivered a solid H1 performance, growing sales, gross margin and profits through market share gains and continued momentum across trade, e-commerce, marketplace and group sourcing," said Thierry Garnier, chief executive.
The breadth of the upgrade, spanning profit, free cash flow and trade and e-commerce penetration, suggests Kingfisher's diversification away from pure DIY footfall toward trade and digital channels is gaining traction even as one of its four fascias, Brico Dépôt France, continues to underperform.
Oxford Biomedica reiterates guidance as H1 revenue rises
Oxford Biomedica (LSE:OXB), the cell and gene therapy contract development and manufacturing organisation, reported constant currency revenue growth of 10% to £80.2m for the six months to 30 June, with reported revenue up 9% to £79.8m. Adjusted operating EBITDA improved to a loss of £2.5m from a loss of £3.9m a year earlier, driven by stronger revenues and cost discipline, though gross margin fell to 37% from 43% on product and client mix.
The company signed 17 new clients in the first half, more than 30% above the total for all of 2025, with a further four signed since period end taking the total portfolio to 59 client programmes and 50 clients. Revenue backlog stood at approximately £193m at 30 June, with roughly £168m of forecast full-year revenue already covered by contracted orders as of September. "Our Durham, NC site is now operationally ready and serving clients, with GMP manufacturing capabilities online and the first GMP run completed," said Frank Mathias, chief executive.
The pace of new client signings and the scale of contracted backlog give Oxford Biomedica clearer forward revenue visibility than it has had in recent periods, even as margin compression underlines that mix shift, not just volume, will determine how quickly the CDMO reaches sustainable profitability.
PCI Pal confirms BT reseller partnership
Pci Pal (LSE:PCIP) has formally confirmed a reseller agreement with BT, signed in March and now generating its first customers as onboarding activity builds. The arrangement gives PCI Pal access to BT's enterprise customer base for its secure payment technology.
Management is positioning the partnership as a contributor to growth in the coming financial year, with the deal expected to build momentum through FY27 as onboarding progresses.
Metlen commits funds to boost recycled aluminium capacity
Metlen Energy Metals (MTLN) is investing nearly €25m in EP.AL.ME to expand recycled aluminium processing capacity and deepen ties with its Aluminium of Greece plant.
The investment extends Metlen's push into circular metals production, aligning recycled aluminium output more closely with its primary smelting operations at Aluminium of Greece.
Rentokil Initial sells SOLitude Lake Management to Bain Capital
RENTOKIL INITIAL (RTO) is selling its US lake and pond management business, SOLitude Lake Management, to Bain Capital for $230m. The disposal continues the pest control and hygiene group's programme of portfolio simplification.
The sale proceeds are expected to support Rentokil's ongoing efforts to reduce leverage as it narrows its focus to core pest control and hygiene operations.
