Rising demand for bomb detection machines in airports has helped to push up annual profits by 25 per cent at Smiths Group, the engineering conglomerate.

The company, which also makes machines to monitor patients in hospitals, launched details of a restructuring programme, aimed at saving £47 million a year and improving operations and customer service.

Philip Bowman, who joined as chief executive nine months ago, said each of the group’s five divisions would have their own targets, that it would build the business through acquisition to bring in new technologies, and the company would spend more on research and development.

The shares rose 22p to £10.41.

However, Mr Bowman gave warning that “sustained upheaval” in the world economy may disrupt government spending patterns, particularly in the US and India where there are forthcoming elections. He said the company was well placed to meet such challenges.

Pre-tax profit for the 12 months to July 31 rose from £256 million to £319.3 million, with sales up 7 per cent to £2.3 billion.

The group said that sales at its detection unit, which makes checkpoint explosive detection systems for airports in the UK and US, rose 12 per cent to £509 million. Unlike normal x-ray machines, the company's equipment captures multiple views of passengers' luggage in a single sweep. Smiths is also developing technology that detects weapons, explosives and other potentially dangerous items concealed under layers of clothing without physical contact.

But sales at its medical unit were flat at £703 million, hit by three product recalls and disruption to its supply chain. The company said that a performance improvement programme was underway to address the issues that have held back the division over the past two years.

Smiths also said that its Interconnect division had won long-term design and supply contracts on US military communications programmes worth a potential £225 million.

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