Smith & Nephew lifts H1 profits, lowers FY revenue guidance

4th Aug 2026 08:21

(Sharecast News) - Medical equipment manufacturer Smith & Nephew posted improved first‑half revenue and operating profits on Tuesday but trimmed its full‑year revenue growth outlook, saying it now expects around 4% growth rather than the 6% previously guided.

Smith & Nephew delivered H1 revenue of $3.10bn, up 4.6% on a reported basis and 2.3% underlying, while operating profits rose 4.3% to $448m and trading profits increased 8.1% to $566m, lifting the firm's trading margin 60bps to 18.3%. Adjusted earnings per share climbed 11% to USD 47.7 cents, and basic EPS rose 6.2% to USD 35.6 cents.

Cash generation remained strong, with higher capex - largely tied to Smith & Nephew's new UK wound‑care factory and IT upgrades - weighing on free cash flow, which came in $13m lower year‑on‑year. The group also raised its interim dividend 4% to USD 15.6 cents.

Despite lowering its full‑year revenue forecast, Smith & Nephew reiterated guidance for around 8% trading‑profit growth, $800m free cash flow and adjusted return on invested capital above 10%. Management said additional efficiency savings of $50m identified for 2026 would offset the impact of softer revenues, taking total savings to roughly $200m for the year.

For the second quarter, revenues were up 2.8% at $1.60bn, with continued strength in Sports Medicine offset by weaker US Orthopaedics and Advanced Wound Bioactives. Several product platforms delivered double‑digit growth.

As of 0820 BST, Smith & Nephew shares were down 6.31% at 1,121.50p.

Reporting by Iain Gilbert at Sharecast.com

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