Emerging markets help Smith & Nephew to H1 profit rise

Medical equipment maker Smith & Nephew said first half operating profit increased to $414m from $357m assisted by growth in emerging markets as it issued unchanged guidance for the full year.

Reported revenue of $2.3bn was flat due to currency headwinds and the impact of 2016 disposal of its gynaecology division. A 13% rise in second quarter emerging markets revenues helped offset these factors, S&N said.

Earnings per share rose to 37 cents from 27 cents reflecting one-off tax benefit along with improvements in trading profit margin and tax rate. The interim dividend was held at 12.3 cents.

Cash generated from operating activities rose to $438m from $380m a year earlier, while trading cash flow was up to $327m from $255m with a trading profit to cash conversion ratio of 66%, S&N said.

Chief executive Olivier Bohuon said the company was “taking good momentum into the second half and I am confident that we are on-track to deliver our full year revenue and trading margin guidance, which is unchanged”.

“We continue to expect underlying revenue growth of 3-4% and a 20-70bps improvement in trading profit margin for the full year.”