SMITH & NEPHEW PLC

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UK's Smith+Nephew shares dive 10% after profit margin warning

07/28/2022 | 03:36am

(Reuters) - British medical products maker Smith+Nephew on Thursday warned of lower annual profit margin, weighed by surging inflation and supply chain challenges, sending its shares down 10% to their lowest since March 2020.

The London-listed company expects profit margin for 2022 to be around 17.5%, compared with an earlier forecast of 18.50%. It also reported a 4% fall in trading profit for the first half of the year.

Founded in 1856, Smith+Nephew makes orthopaedic implants and prosthetics, along with wound dressings and other surgical technologies.

"Orthopaedics continues to be held back by execution and supply chain challenges", Chief Executive Office Deepak Nath said, after the division reported a 1.1% decline in its revenue for the quarter ended on July 2.

Medical product makers saw challenges due to the COVID-19 pandemic as the crisis forced hospitals to delay elective surgeries to accommodate infected patients, and the supply chain issues still linger amid the spread of new variants.

The company, which reported a 3.5% rise in underlying revenue for the first half of year, continues to expect full-year underlying revenue growth of 4% to 5%.

(Reporting by Radhika Anilkumar in Bengaluru; editing by Uttaresh.V)

Reuters 2022
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