Smith & Nephew’s H1 profits rise 6%

(Reuters) — Smith & Nephew (NYSE:SNN) beat market expectations with a 6% rise in 1st-half trading profit after growth accelerated in its knees implant and advanced wound care businesses.

The British company reported trading profit of $512 million, 3% ahead of consensus, helped by a 70-point rise in its margin to 22.5% and 4% underlying revenue growth.

CEO Olivier Bohuon said the group had made good progress towards its goal of increasing revenue faster this year than in 2014, when it rose 2%, and improving its margin.

“We have done, this quarter and for the 1st half of the year, exactly what we were expecting to do,” he said today.

Highlights included continuing improvement in advanced wound care, with revenue up 12% in the 2nd quarter, double-digit growth in emerging markets, and a market-beating performance in knee implants, he said.

Shares in Smith & Nephew were trading up 1.4% at £11.51 at 7:41 a.m. GMT.

Analysts at Bank of America-Merrill Lynch, who rate Smith & Nephew a “buy”, said it was an “encouraging” 1st half for the company. It raised its 2015 and 2016 forecasts for earnings per shares by 1% to 86¢ and 98¢, respectively.

The company is buying Zimmer’s U.S. Unicondylar knee implant business, an asset the U.S. company is being forced to divest to win approval for its takeover of Biomet inc.

Bohuon said the products fitted very well into its range, and the company had started selling them this month.

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