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Smith & Nephew PLC shares fell on Thursday after the medical equipment maker recorded a drop in interim profit and cut the full-year guidance for its trading profit margin.
Smith & Nephew shares were trading 10% lower at 1,077.17 pence each in London on Thursday morning, making it the worst FTSE 100 performer.
For the six months to June 30, the Watford, England-based company posted a pretax profit of $204 million, down 8.5% from $223 million a year before.
The prior period benefited from a $22 million gain following a disposal of interest.
Trading profit fell 4.1% to $440 million from $459 million, due to a margin decline that reflected higher input inflation in freight and logistics.
Revenue remained flat year-on-year at $2.60 billion.
Smith & Nephew attributed this to a currency headwind, primarily due to the strength of the US Dollar and one less trading day compared to the first half of last year.
The FTSE 100 company declared an interim dividend of 14.4 US cents, unchanged compared to a year prior.
Looking ahead, Smith & Nephew kept its 2022 underlying revenue growth guidance of 4.0% to 5.0% unchanged.
However, its trading profit margin is now expected to be around 17.5%, down from the 18.5% previously guided. Its trading profit margin in 2021 was 18.0%.
The firm explained that the downgrade reflects the ‘prolonged impact of the inflationary environment and continued external supply challenges’.
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