Smiths Group has reported stronger-than-expected annual operating profit and begun a process to dispose of its long-running US asbestos liability, marking a significant step in the British engineering company’s post-restructuring strategy.

The group said headline operating profit reached approximately £580 million for the financial year, ahead of market expectations of about £573 million. The result was supported by demand for screening and detection equipment, according to reporting published on Tuesday.

Asbestos liability sale begins

Smiths has launched a process to sell the US asbestos liability linked to John Crane, its former engineering division. The liability carried provisions of about £191 million in the 2025 financial year and relates to long-running mesothelioma litigation.

The move could give investors greater clarity over a legacy risk that has weighed on the group for years. The final outcome will depend on the terms of any transaction and the willingness of potential buyers to assume the associated legal and financial exposure.

Portfolio overhaul reshapes the group

The announcement follows a sweeping portfolio overhaul in which Smiths sold its Detection and Interconnect businesses. Those disposals generated more than £3 billion in enterprise value and have left the company focused on industrial engineering operations.

Smiths has indicated that the proceeds from the restructuring will support shareholder returns, including ongoing share buybacks. The narrower business is intended to provide a clearer investment proposition while reducing the complexity of the group’s former portfolio.

Investor focus turns to execution

Tuesday’s results give Smiths a positive operational backdrop as it manages the next phase of its transformation. Investors will now assess whether the company can sustain demand in its core markets while completing the asbestos-liability process on acceptable terms.

The disposal of the liability would not remove the need for careful legal and financial oversight, but it could reduce uncertainty around one of the company’s most persistent legacy issues. Smiths’ ability to convert its simplified structure into consistent growth and shareholder returns is likely to remain central to the investment case.