Business Live | Brand new luxury British and European cars are entering Russia despite being banned

Summary

This video discusses the ongoing issue of British-made cars being exported to Russia despite sanctions, with insights from experts like Stephanie Baker from Bloomberg. It highlights the complexities of sanctions enforcement, the role of parallel imports, and the impact on the Russian economy, which faces inflation and high interest rates. The conversation also touches on China's economic stimulus, global market reactions, and perspectives from UK business leaders, emphasizing the influence of global policies on local economies and industries, including the UK's growing optimism amidst economic challenges.

Takeaways

• 🚗 British-made cars are still being exported to Russia, despite sanctions, through a black market system via countries like Georgia and Kazakhstan.
• 📈 Sanctions are causing inflation in Russia, with car prices being significantly higher than in the US market.
• 💰 Russia's economy initially faltered after the invasion of Ukraine but has since recovered due to high oil prices.
• 🏦 Western nations, including the US and EU, have warned about sanctioning foreign banks doing business with Russia, particularly targeting Chinese banks.
• ⛽ Putin's war is being financed largely through oil profits, despite sanctions attempting to undermine Russia’s economic stability.
• 📉 Russia’s inflation rate is 9%, and the central bank has raised interest rates to 19% to combat the inflationary pressure caused by military spending.
• 💵 The Western coalition’s sanctions have significantly affected Russia, though challenges remain in fully isolating the economy due to its oil exports.
• 🏦 China's central bank has introduced stimulus measures to address its property market slump and boost consumer demand.
• 🌐 Global markets reacted positively to China’s stimulus, with luxury brands and automotive companies seeing stock gains.
• 💷 The British pound has hit its highest level against the dollar in two and a half years, reflecting stronger-than-expected economic growth in the UK.

Q & A

What is the main focus of the discussion regarding Russia in the provided transcript?

The main focus is on how sanctions imposed on Russia are being circumvented, particularly through parallel imports, which enable Russia to continue its economy and war efforts despite facing sanctions.

How are companies like Jaguar Land Rover responding to sanctions related to Russia?

Jaguar Land Rover claims to be fully compliant with sanctions but admits they are struggling to prevent vehicles from entering Russia through parallel imports, despite efforts to stop this from happening.

What impact have sanctions had on Russia's economy, according to the transcript?

Sanctions have contributed to high inflation in Russia, with inflation rates at 9% and interest rates raised to 19%. However, Russia's economy has remained resilient, partly due to high oil prices.

What role do parallel imports play in sustaining Russia’s economy?

Parallel imports allow goods, particularly cars, to enter Russia through neighboring countries like Georgia and Kazakhstan. This has helped Russia avoid a severe economic crisis despite sanctions.

How has the Russian economy adapted to the sanctions, and what challenges remain?

Russia's economy initially faltered but recovered due to high oil prices. However, sanctions, especially secondary sanctions targeting foreign banks doing business with Russia, have put additional pressure on the economy, and growth is expected to slow significantly next year.

What is the significance of oil in Russia’s ability to withstand economic sanctions?

Oil exports have been a central factor in Russia’s resilience against sanctions. The war caused oil prices to spike, allowing Russia to earn substantial revenue, which has supported its economy and war efforts.

How have Chinese banks been affected by the recent secondary sanctions on Russia?

Secondary sanctions, which target foreign banks facilitating business with sanctioned entities in Russia, have caused Chinese banks to reduce their involvement, leading to a shortage of Chinese yuan in Russia.

What is the current state of inflation in Russia, and how is the central bank responding?

Inflation in Russia is at 9%, and in response, the central bank has increased interest rates to 19% to cool down inflation, which has been fueled by war-related spending.

What was discussed regarding the UK’s economic situation in relation to sanctions on Russia?

The report mentions that despite efforts by companies like Jaguar Land Rover to comply with sanctions, goods are still entering Russia. UK car exports to regions like Azerbaijan and Kazakhstan are still valued at around £30 million in the latest available data from July.

What broader economic trends were highlighted in the transcript about global markets?

The transcript highlighted various global economic trends, such as a positive reaction in Asian and European markets to China's stimulus measures, a rise in UK holiday bookings, and fluctuations in oil prices due to tensions in the Middle East.

Outlines

00:00

🛑 Russia's Economic Resilience Amid Sanctions

The paragraph discusses the ongoing sanctions imposed on Russia due to the war in Ukraine, highlighting how the country has managed to evade economic crisis. Despite efforts from companies like Jaguar Land Rover to comply with sanctions, a black market has emerged, allowing for the continued flow of UK car exports to Russia. Data from July reveals that around £30 million worth of car exports were still entering Russia via countries like Kazakhstan and Georgia, raising concerns about the efficacy of the sanctions.

05:02

🚗 Impact of Sanctions on Russian Car Imports and Inflation

This segment focuses on how Western sanctions have affected car imports in Russia. The report mentions that due to the sanctions, car prices in Russia are significantly higher than in the US, contributing to inflation, which stands at 9%. The central bank of Russia has raised interest rates to 19% in an effort to control inflation. However, sanctions are straining the Russian economy, especially for those with limited financial resources. The broader picture of Russia's heavily sanctioned economy shows resilience, but with rising inflation and financial strain.

10:04

💸 Russia's Sanctions Recovery and Economic Tactics

Russia's ability to recover from the sanctions imposed after the 2022 invasion of Ukraine is explored in this section. The country initially faltered but recovered due to high oil prices. Despite efforts to limit Russia's oil exports, the country continued profiting, complicating the West's efforts to weaken Russia's war machine. The US and its allies have introduced stricter sanctions, targeting foreign banks that do business with Russian entities, and this has slowed economic activity, especially in China, which had been a major facilitator of imports to Russia.

15:06

📉 Chinese Stimulus and Global Market Reaction

This paragraph outlines the global market's reaction to a new round of stimulus measures from China's central bank. China cut the reserve requirement for banks and slashed interest rates to tackle a severe property slump and weakening consumer demand. Global markets, including Asia and Europe, surged in response. The travel company TUI reported increased bookings and profits, showing optimism despite economic concerns. Mining companies like Anglo American and Rio Tinto also benefited from the market surge.

20:08

📊 Analysis of Markets and Economic Projections

The section provides insights into the ongoing market trends and their responses to China’s stimulus efforts. The S&P 500 and Dow Jones reached new highs, while European markets also saw gains. Companies like BMW and Mercedes-Benz led the way. Attention shifts to the pound’s strong performance against the US dollar, reflecting perceived economic strength in the UK. Additionally, an expert provides views on the potential long-term impacts of China’s economic measures and how they may affect global markets.

📉 UK Business Sentiment and Growth Outlook

In this segment, a financial expert discusses the UK economy's resilience, citing better-than-expected growth figures and the pound's strong performance. The UK economy, though not as strong as China’s, has managed to surprise with positive growth figures, leading some experts to predict further strength for the pound. The expert highlights that sustained growth could push the currency toward pre-Brexit levels of 1.50 USD, although there is no firm forecast for such a shift.

📈 Smith’s Group Earnings and Strategic Moves

The focus shifts to Smith’s Group, a UK-based engineering company that has posted strong earnings growth, with a 5.4% organic revenue increase and significant acquisitions in North America. Despite these positive results, the company’s shares dropped due to market reactions. The Chief Financial Officer discusses their strategy and outlook, emphasizing the company’s focus on innovation and acquisitions, while reaffirming confidence in future growth driven by safety, security, and energy efficiency sectors.

Keywords

💡Sanctions

Sanctions refer to the punitive measures imposed by governments or international bodies to restrict trade and economic activity with a country. In this video, the discussion centers around sanctions imposed on Russia following the invasion of Ukraine in 2022, which aim to cripple its economy and limit its war efforts. Despite these efforts, Russia has found ways to circumvent sanctions, particularly through parallel imports.

💡Parallel Imports

Parallel imports are goods brought into a country through unofficial or unauthorized channels, bypassing formal trade routes. In the context of this video, parallel imports are a method by which Western goods, particularly cars, are still reaching Russia despite sanctions. This undermines the effectiveness of the sanctions and is a key issue discussed in relation to the ongoing war.

💡Russian Economy

The Russian economy is described as resilient despite the heavy sanctions imposed on it. The video explains that high oil prices have helped Russia recover from the initial economic fallout of the sanctions, allowing it to continue financing its war in Ukraine. However, inflation and high interest rates pose long-term challenges, particularly for citizens without significant financial resources.

💡Oil Prices

Oil prices are critical to Russia's ability to sustain its economy under sanctions. The video explains that Russia has profited from the global increase in oil prices following its invasion of Ukraine, which has allowed it to continue funding its military operations. This reliance on oil exports is a major factor in the global economic response to the war.

💡Inflation

Inflation refers to the general increase in prices and the fall in the purchasing value of money. In Russia, inflation has reached 9%, driven by war-related spending and economic sanctions. The video discusses how inflation is putting pressure on the Russian economy, leading to higher interest rates set by the central bank to control rising prices.

💡Interest Rates

Interest rates are the cost of borrowing money, controlled by a country's central bank. In the video, it is mentioned that Russia's central bank has raised interest rates to 19% in an effort to curb inflation caused by the economic pressures of war and sanctions. This high rate is indicative of the challenges facing Russia's economy despite its ability to continue waging war.

💡Corporate Compliance

Corporate compliance refers to companies adhering to legal and regulatory requirements. The video highlights how companies like Jaguar Land Rover are attempting to comply with the sanctions imposed on Russia, even though their products are still entering the country through parallel imports. This highlights the difficulty of fully enforcing sanctions in a globalized market.

💡Secondary Sanctions

Secondary sanctions are penalties imposed on third-party countries or entities that do business with a sanctioned country. In the video, the US and its allies are described as increasing pressure on foreign banks, particularly Chinese banks, through secondary sanctions. This has led to a shortage of Chinese yuan in Russia, further tightening economic conditions.

💡Central Bank Reserves

Central bank reserves refer to the foreign currency holdings and assets that a country's central bank maintains. In the case of Russia, the video mentions that a significant portion of its central bank reserves were frozen by Western countries in response to the Ukraine invasion. This action was intended to limit Russia’s financial ability to wage war but has been partially mitigated by high oil revenues.

💡China's Economic Stimulus

China’s economic stimulus refers to the measures taken by China's central bank to boost its economy, including cutting interest rates and reserve requirements. The video notes that these actions have led to a surge in markets across Asia and Europe, as they are intended to counteract a slowdown in China's property market and consumer demand, showing the global interconnectedness of economies.

Highlights

Sanctions imposed on Russia have not stopped the black economy, allowing parallel imports of goods like cars.

Despite sanctions, Russia has been able to avoid an economic crisis and continues to finance its war effectively.

British-made cars are still entering Russia through places like Georgia and Kazakhstan despite attempts to stop them.

Russia's inflation rate has risen to 9%, and the central bank has raised interest rates to 19% in an attempt to cool prices.

Western-made cars in Russian showrooms are now being sold for double their price compared to the US market.

Russia's economy initially faltered in the first six weeks after the Ukraine invasion but recovered due to high oil prices.

The sanctions against Russia have been the largest-ever coalition effort to isolate such a significant economy.

Russia's oil exports have been central to its economic recovery, with high oil prices benefiting the Russian economy.

Secondary sanctions imposed on foreign banks, particularly Chinese banks, have started to impact Russia's ability to trade.

The Russian economy is expected to slow down significantly next year due to increasing pressure from sanctions.

China's Central Bank introduced a stimulus package, including reducing bank reserve requirements and slashing interest rates, to counter its property market slump.

The Chinese stimulus measures are designed to revive consumer demand and economic growth amid sluggish performance.

The UK pound is at its highest level against the US dollar in two and a half years, reflecting improved UK economic growth.

Western economies are watching China's recovery closely, with hopes that stimulus efforts will drive real-world improvements.

UK growth is modest compared to China’s, but improvements in forecasts have helped strengthen the pound.

Transcripts

they are uh We've shown that this stuff

is happening and it may not be there in

those charts uh that we talked about

earlier on this year but finally we're

able to document this process happening

and I think those who are imposing these

sanctions and those who are supposed to

be implementing them should be asking

themselves why is this still happening

two and a half years on and this is part

of the explanation for why Russia isn't

facing an economic crisis at the moment

and is able to wage war so effectively

uh against Ukraine and it begs the

question what can corporate do about it

I know you spoke to Jaguar Land Rover

who said they're fully compliant with

the sanctions list is there anything

they can do they are and they they are

struggling they're trying their hardest

to try to prevent this kind of thing

from happening they have a duty to try

and prevent this kind of thing from

happening there is this enormous black

economy which is developing to try to

get these uh these vehicles through um

they they say that it's quite difficult

once they've actually entered even

though we provided those VIN numbers to

Jr they say it's difficult to actually

stop them to to make them uh ineffective

but they are trying their hardest but

nonetheless this continues and this is

something that we've documented it's

something we've been talking about for

quite some time even after our reports

showing that these flows of goods are

happening um we were seeing those cars

continue and the latest month that we

have data for for July that shows around

30 million pounds worth uh of UK car

exports again going through uh to aaban

in that case and also to places like

Georgia and Kazakhstan um so it's still

going on uh even two and a half years on

okay we'll leave it there eom for now

thank you very much well let's continue

the conversation now and joining me is

Stephanie Baker she is a senior writer

at Bloomberg and she's also the author

of punishing Putin inside the global

economic War to bring down Russia thank

you Stephanie for your time this morning

and Ed's report there're showing uh what

we believe to be the first filmed

evidence of British made cars crossing

into Russia what do you make of his

findings yeah that was a really great

report it was something that my book

punishing Putin went into I I didn't go

to Russia personally because I didn't

feel safe enough to travel there but I

did work with um a Russian reporter to

check out these parallel Imports um and

he detailed this system of particularly

in other former Soviet States uh a

system of parallel Imports and

particular with that's visible with cars

uh it is having an effect on the Russian

economy though because there are costs

that are being passed on um my reporting

showed that car Western cars uh uh in

showrooms in Russia in Moscow in January

at least of

2024 were on sale for at least twice as

much as they were going for uh on us on

the US market so that is feeding into a

broader uh sticky inflation that Russia

is suffering from inflation in Russia is

9% the central bank has had to hike

interest rates to 19% to try to cool

prices and is sort of working uh against

Putin's uh War economy he's showered all

this money on defense factories on

bonuses for soldiers to go fight on the

front that's fueled inflation the

central bank is trying to cool that but

the sanctions are contributing to high

inflation which is weakening the Russian

Russian economy long term especially

those who don't have Deep Pockets but

let's just have a look at the wider

picture if you if you will because um we

know that Russia became the most

sanctioned country uh in the world 30

countries trying to isolate that economy

uh when they first invaded Ukraine back

in 2022 of course we're two years on now

so what is the state of the Russian

economy right

now right well you've seen uh Russia

able to respond and recover from these

unprecedented sanctions uh the largest

Coalition that's ever tried to isolate

an economy as big as Russia and is

integrated in the the Western Financial

system you know this is not Cuba this is

not North Korea this is not Venezuela

this is a completely different ball game

uh and the IT Russia did falter its

economy did falter in the first sort of

six weeks after the invasion in response

to these unprecedented moves including

the freezing of Russia's Central Bank

Reserves in the west but then it

recovered on the back of high oil prices

and that has been the central challenge

facing the Western Coalition trying to

undermine Putin's ability to finance

this war War has been Russia's Central

role as an oil exporter uh he actually

profited from the war he started because

oil prices spiked uh amid panic over

Russian Supply and people kind of moving

away from wanting to touch Russian oil

so that is enabled him to continue to

earn huge amounts of money uh from oil

and that is the main challenge however

what's happened more recently the US and

its allies UK Europe have stepped up War

warnings uh about sanctioning foreign

banks that do business with sanctioned

entities in Russia so-called secondary

sanctions and that is actually caused a

chill particularly among Chinese banks

that have been facilitating a lot of

these parallel Imports and you see a

shortage of chines wand so there is

pressure building within the Russian

economy right now and it's expected to

slow okay significantly next year we

have to leave it there thank you so much

for joining us Stephanie Baker senior

writer at Bloomberg and the author of

punishing Putin in the global economic

War to bring down

Russia and Ed Conway has written an

in-depth report on what he found out in

Georgia just scan the QR code on your

screen now to read it it is well worth a

few minutes of your

time let's get some of the day's other

business stories for you now a really

big day in the markets today the markets

have been soaring in Asia and Europe

following a surprise raft of stimulus

measures announced in China China's

Central Bank has cut the requirement for

Bank Reserves it's also slashed interest

rates on its loans to commercial Banks

the move is designed to address the

severe property Market slump in China

and weakening consumer

demand the Travel Group 2 e says it's on

track for its annual earnings to rise by

at least a quarter as people continue to

prioritize holiday spending the Germany

company a German company reported a rise

in summer bookings of 6% and an increase

of 7% in Winter Holiday reservations

[Music]

let's see how those markets are doing

now the S&P 500 and DOW Jones reach new

closing highs last night while as you

can imagine in Asia markets are soaring

following China's surprise stimulus

package Hong Kong's H sang index was up

nearly 4% after that decision that is

the best day in over seven months

Shanghai had a similarly positive

session up over 4% on the close now onto

Europe now markets bouncing everywhere a

sea of blue there following that news

from China continent Cal Europe looks a

little like this also stocks have been

doing particularly well the liks of BMW

Mercedes-Benz group and Volkswagen

leading the way we talked about Tui they

are also making gains after those

positive quarterly profits and we're

going to have a look at the footsy 100

now it is trading Higher by 4/10 of 1%

mining companies are leading the way on

this index the lights of Anglo American

Glen cor Anto fasta and Rio Tinto all

enjoying gains this morning there is

stocks the downside let's check in on

those for you Smith's group big

engineering company the biggest European

Faller down 6.59% full year resultsa

pointing we will be talking to CFO in a

few minutes time so stay tuned for that

quick look at the pound remaining at its

highest levels against the US dollar in

two and a half years it is currently

trading uh up nearly 2/10 of 1% at

1.34 on the oil market now for you of

course all eyes watching oil as rising

tensions are in the Middle East a barel

of Brent crude currently setting you

back at

7567 that's up

2.41% let's get some expert opinions for

you now Laura F Equity income fund

manager at Janus Henderson joins us now

Laura good to have you on the program

what a day you you've been kept on your

toes that's for sure uh tell us your

views on the Chinese Central bank's

intervention what's the significance of

this in your

opinion never a dull moment you're right

I think what surprised the market is

really the bread of the measures that

have been announced today so there was

wide skepticism that China would hit its

economic growth forecast of 5% for this

year so people were expecting some sort

of stimulous effort but it's really as I

say the breadth of these measures so

we've had measures across for example

the mortgage Market it's really as you

said previously that the property

downturn that's that's surprised to the

downside in China so they've implemented

measures to bring down mortgage costs

for people they've also lowered what's

called The Reserve requirement ratio

what this means is that banks have to

deposit less with the central bank so

that they can go out and lend into the

broader economy so there's a whole host

of measures being implemented and I

suppose what we now need to watch is

whether this has the desired impact on

the real economy because undoubtedly it

has been slowing it always makes me

chuckle when we talk about um Chinese

growth being sluggish at 4% because we

would love that it wouldn't we it's

particularly in Europe um but what could

the longer term impact be for markets we

saw those markets in Asia doing well

seven months highs do you think that

feeling could continue I think what

we've got to bear in mind is the share

prices that are reacting today are

generally coming off very low levels so

for example the likes of luxury so burb

is performing well on the London Stock

Market this morning you burb has lost

over half its value this year so it's up

a couple of percent this morning but

really in the scale of things this is a

very minor reaction and I think what the

market will wait for now is is this

having the desired impact so for example

we saw a big profit warning from the

likes of Mercedes a week or so ago I

think people will wait and see these

stimulus measures are they actually

making things on the ground better

because when we speak to companies at

the moment that operate in China they're

saying it's very tough and often getting

worse so I think the market will need to

see an actual real world impact before

making the next move Laura let's get

your views on how the pound is doing as

we looked just a few minutes ago it was

trading at 134 against the dollar really

strong run how long can that continue do

you think I think what we've got to

always think about with currencies is

they reflect perceived strength of

various economies so the fact that the

the pound sterling has done so much

better this year if we think back to Liz

trust you know people were talking about

the pound at one point being parity with

the dollar and and where we are now as

you say 134 we've come a long way and I

think what that reflects is that

actually economic growth in the UK has

surprised to the upside this year and

we've seen consensus forecast for GDP

growth here moving up we're not talking

about particularly Stellar levels as you

say we're talking about no near what

China are trying to get to at 5% we it

would be great if we achieved 1.2 1.3%

growth this year but nevertheless

economic growth forecast have been

moving the right way some such as

Goldman are starting to talk about you

know could we get to 140 versus the

dollar you never know I mean the level

that Sterling used to always be at the

long run average versus the dollar is

one and a half and it was brexit that

really changed that and the pound reset

lower but if economic growth momentum

continues you why shouldn't we start to

think about where the long run average

was so moving back towards that 150

level that would say that's not a

forecast but that's saying that's where

we used to trade that used to be before

we go because we're running out of time

uh All Eyes Of course on S starma speech

in Liverpool this afternoon and much

more positive uh we response we had from

Rachel Reed yesterday what's the city

looking out for from Sid today I mean

we're always on the lookout for policy

announcements but I would say we're

we're not expecting any any great Market

moving announcements what I'm looking

for is more of a shift in tone and and

why I say that is UK consumer confidence

had been on an upward Trend and then

took a dip down and I think the tone

around things getting worse can't have

helped that I think the market and and

me as well we're looking for a more

positive tone going back to that point

about the UK economy actually doing a

bit better it would be nice to see that

reflected in some of the commentary from

the government okay we'll leave it there

Laura thank you very much Laura folder

Equity income fund manager at Janus

Henderson still to come this morning

morning here on business live shares in

the British engineering firm Smith's

group the biggest Faller this morning

following their full year results I'll

be speaking to their Chief Financial

Officer who's coming up next do stay

[Music]

tuned and I think all of those people

who are criticizing and carping

especially those who are carping about

their pay levels really should

absolutely shut up and I do think there

is there is something about um an older

woman in a position of authority that

young men some young men find hard to

take so you

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get the full story

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first I'm David blevens and I'm Sky's

senior Ireland

corespondent politically the two sides

are as far apart as ever and the over

that question of who has sovereignty in

Northern Ireland the very issue that's

been the source of tension here for

Generations I've spent 25 years

reporting the journey from conflict to

peace the political parties of Northern

Ireland have reached agreement we

already know what the government gets

out of this deal what exactly does the

dup get out of it well 1.5 billion if

there's anyone who might know how to

Northern Ireland's devolved government

it's the American architect changes in

circumstance require changes in approach

if we both contract covid-19 and end up

in hospital religion's nothing if

there's a hard B I think it'll

Contra I say bring it on with America

divided and tensions running High get

ready for an election like no other

join our teams as we follow the campaign

Trail as America decides we will win win

win get closer to the action this us

election with full reaction and

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analysisa Sky News the full story

first you want to talk business meet me

in the on board Lounge

[Music]

Fly Emirates fly

better welcome back you're watching

business live now Sak St will make his

first conference speech as prime

minister this afternoon promising light

at the end of the tunnel so how are UK

Business Leaders feeling about the

economy and what are they hoping to hear

from the Prime Minister today well the

footsy 100 engineering company Smith

Group which makes airport security

screening systems among other things

posted its fuler results this morning up

5% to 526 million and joining me now is

CLA Shera she is the chief Financial

Officer of Smith's group CLA welcome to

business live it's uh good to have you

on and I will talk about your results in

just a few minutes time but if you don't

mind first we're looking ahead now to

the labor Party Conference in Liverpool

that's happening this afternoon the

Prime Minister s starma speaking saying

we think that he'll say there'll be

light at the end of the tunnel um and as

a senior leader in a foot 100 company do

you share his optimism over the outlook

for the UK economy given you do a lot of

business here

well thank you Emma for having us on

today and it's really not my place to

comment on government policy but what I

can comment on is what we're

experiencing today and the results that

we reported today reflect that so 5.4%

organic Revenue growth 88.3% earnings

per share growth and that on top of

record growth last year also beating

consensus both on the top line and the

bottom line also very frontf footed

we've announced two acquisition in North

America and we have a confident stance

as we enter

fy2 we gave a confident guide for fy2

for continued growth in the range of

four to six% organic growth and also

continued margin Improvement we benefit

from being exposed to secular trends

that have a real Tailwind right now so

the experience that we're having right

now is a very positive one and that's

great to hear what about within the UK

because of course you've exposure to the

UK economy as well as all other

economies around the world what is your

outlet for the UK right

now well our business in fy2 24 in

Europe and in the UK was very positive

we had very good growth and again that's

because of the trends that were exposed

to namely Safety and Security and Energy

Efficiency where our customers are

really making investments in those

opportunities the other thing that I

would say is we're benefiting from our

innovation commercializing and dropping

to the bottom line so when we look at

the growth that we reported this morning

200 basis points of that growth was

driven by new products that we

introduced over the last five years I

just want to ask you quickly about

Innovation as an engineering firm

Innovation is at the heart of what you

you do we've talked an awful lot about

Innovation from the lights of the

inflation reduction act in the United

States and the chip act that's also been

in the states we haven't had that kind

of policy here in the UK are we lacking

in that what would you like to see in

terms of innovation in the

UK well as I said keeping the world

safer more energy efficient and better

connected are all secular Trends which

are

longitudinal and which will persist

regardless of what policy we have in any

locality or who's in office in any

locality so at any point in time

different stimulus packages might change

the quarter to quarter shape but in

general en we really benefit from those

really strong tail ones okay let's have

a look at your results in a bit more

detail now um strong for your revenue of

3.1 billion on organic growth of

5.4% uh the shares though biggest Faller

in Europe this morning certainly at one

point um on consensus the numbers missed

the mark are you disappointed that must

sting well we actually beat consensus on

both the top line and the bottom line so

from an organic perspective uh we

exceeded consensus expect a for organic

growth and also at the bottom line with

88.3% EPS growth we also beat consensus

on on the EPS line so the share

performance today does that not

sting uh well of course I can't control

how the market reacts what we can

control is what we deliver and we're

really proud of what we delivered today

um as it stands apart in terms of the

last couple of conversations that you

were just having in terms of magnitude

of organic growth um a 5 4% organic

growth actually really stands apart from

some of the trends that we've been

seeing in general we one final question

I'm running out of time afraid CLA two

big Acquisitions any more in the

pipeline very briefly yes we have an

active pipeline we're going to maintain

um our focus on strategic Acquisitions

and of course we'll remain disciplined

but we're pleased to have an active

pipeline we'll leave it there thank you

so much for joining us CLA Shar there

Chief Financial Officer of Smith's

groups are coming out with their full

year results today

that's it from me for the moment I'll be

back with the afternoon edition of

business live at 4:30 to give you a wrap

up about the European markets go into

the close we'll see you then in the

meantime wolfer Frost picks it up at

12:00 with all your lunchtime news see

you in moment

[Music]

[Music]

[Music]

[Music]

[Music]