Rising steel prices and the weak dollar have contributed to virtually flat annual profits at safety equipment maker Halma.
The company, also said its water unit was unlikely to return to historical profit levels for up to three years.
The firm, which has sites in Wolverhampton and Coventry, reported profits before tax, goodwill and exceptional items of £50.4 million for the 52 weeks to April 2.
The result was almost exactly in line with a consensus of analyst forecasts polled by the company.
Turnover from continuing operations rose seven per cent to £299.1 million, reflecting a greater contribution from its enlarged optics and specialist business.
The company has 45 subsidiaries, which manufacture detection and protection equipment for fires and gas and water leaks as well as resistors to protect industrial power systems from electrical damage,
Chief executive Andrew Williams said the weak dollar and price rises for raw materials such as steel had knocked around £2.5 million off profits.
He added that its water division, whose profits more than halved to £2.6 million, was hindered by the ending of a lucrative US contract in Las Vegas and might take several years to return to levels of around £5.8 million earned in 2003-2004.
The division makes equipment to treat water using ultraviolet light and instruments to analyse water quality and control water distribution.
He said his task would be aided by a new round of investment from British water companies and a growing list of possible contracts in the United States.
Mr Williams, who took charge in February, said he was reviewing all Halma's businesses to see which should receive greater investment and to identify those that could be sold.
"I believe we have sufficient opportunities in our existing sectors or closely adjacent to our sectors, but there is a need for us to be more selective in the way we allocate resources to the higher-growth sectors," he said.
Williams added that the company needed to be more active in selling businesses that were underperforming or trading in poorly performing sectors.
Halma's optics business was the best performing last year, helped in part by two acquisitions, of Diba and Ocean Optics, but its resistors business struggled due to seeing pretax profits fall to £1.4 million from £2.2 million a year ago.
