Smith & Nephew’s half year results showed a more-than 20 per cent lift in its operating profits as the group credited its 12-point plan at becoming a “more profitable business”.
The group’s first-half revenue was $2.8m (£2.2m), up 4.3 per cent on its results for the first half of last year, which was at $2.7m. Its operating profit of $328m (£255m), up 19.5 per cent on $275m (£214m).
Following its results this morning, Smith & Nephew’s shares rose by almost 9.5 per cent in early trades.
The company’s trading profit rose by nearly 13 per cent to $471m (£367m) from $417m in the same period last year, as the group’s cash generated from operations was at $368m (£286m), up from $215m.
While the group stated it made significant improvements in trading cash flow conversion at 60 per cent, compared to 26 per cent in 2023, trading cash flow increased to $284m (£221m) from $110m.
The group credited its so-called 12-point plan for driving the performance, which includes fixing orthopaedics, to regain momentum across hip and knee implants, robotics and trauma, and win share with its differentiated technology.
In addition, it plans to improve productivity, to support trading profit margin expansion; and further accelerate growth in advanced wound management and sports medicine and ENT franchises
Commenting on the results, chief executive Deepak Nath said: “Today’s results are further evidence of the good progress we are making transforming Smith & Nephew into a higher growth and more profitable business.”
He explained that “across the majority of orthopaedics, which was our underperforming business unit, we are now consistently achieving growth rates well above historical levels.”
“The methods we employed in achieving these successes give me confidence that we will also turn around US hip and knee Implants and we expect to see a step up through the second half of the year,” he added.
The group’s 2024 outlook guidance remained unchanged, as its underlying revenue growth expected in the range of five per cent to to per cent, and trading profit margin expected to be at least 18 per cent.