In the six months ended 31 January, Smiths Industries recorded pre-tax profits of £110m before goodwill amortisation, an increase of 10% on the first half of the previous year. At 24.5p (1999: 22.2p), earnings per share were also up by 10%, and the Board has declared a dividend increased by 9.5% to 8.1p (7.4p), with a scrip dividend alternative available to shareholders. Amortisation of goodwill on acquisitions amounted to £2.6m (£0.5m) for the period.
      The company earned operating profits of £113m (£103m) before amortisation, on turnover of £649m (£607m) for the half year, leading to a half point increase in margins to 17.4%. The 10% improvement in operating profits came equally from organic growth and from a full six months’ contribution from 

acquisitions announced during the previous financial year. Cash-flow from operations (measured after capital expenditure) was £72m, almost identical to last year despite an increase in working capital to finance higher production volumes in all three operating divisions.
      During the six months’ period, the company spent £157m to acquire four businesses which complement its existing activities. Most of these were completed towards the end of the period, and so did not make a significant contribution to the results. Since the end of the period, the company has announced the acquisition of the interconnect company EMC Technology and the Actuation Systems division of BAE Systems. In total these six recent additions, which cost £246m, have an annualised 

turnover of more than £150m, and are expected to make a contribution to profits in excess of their funding costs by the year end. Net debt at 31 January stood at £245m, up from £93m at the end of last year.
      All three of the company's operating divisions contributed to the increase in sales and profits. While Industrial and Medical improved significantly, the gains in Aerospace were modest, following a 42% increase in first-half profits last time. On a geographical market basis, the company’s operations in the United States continued to perform strongly in a favourable economic environment, while trading conditions in the UK and other countries have been more variable. Although currency variations have had a negligible