Turn around plan bearing fruit at medtech group

Hull-based med tech group, Smith+Nephew, says it is achieving growth in previously underperforming parts of its operation as it publishes its second quarter and first half 2024 results.
It reports quarter two revenue of $1.4bn/£1.1bn, up 5.6% on quarter two 2023 and half one revenue of $2.8bn/£2.2bn, up 4.3% on H1 2023. Half one pre-tax profits were £253m (H1 2023: £211m).
Smith+Nephew notes that its 12-Point Plan, unveiled in 2022 to fundamentally change the way it operates and to transform business performance, is now delivering results and translating into improved financial performance.
Deepak Nath, chief executive officer, said: “Today’s results are further evidence of the good progress we are making transforming Smith+Nephew into a higher growth and more profitable business.
“Across the majority of Orthopaedics, which was our underperforming business unit, we are now consistently achieving growth rates well above historical levels.
“The methods we employed in achieving these successes give me confidence that we will also turn around US Hip and Knee Implants and we expect to see a step up through the second half of the year.
“Our progress is also showing through in our double-digit trading profit growth and margin expansion, driven by positive operating leverage and efficiency initiatives. I am pleased to see this profit growth translate into cash flow, with our first-half trading cash flow up more than 150% year-on-year.”
The business adds that cash generated from operations during the first half was $368m/£287m (H1 2023: $215m/£168m) and trading cash flow increased to $284m/£222m (H1 2023: $110m/£86m), with 60% trading cash conversion (H1 2023: 26%), a “significant improvement” on the prior year.
Smith+Nephew says it expects more benefits from its 12-Point Plan to come through in the second half of 2024 and beyond and will continue to seek opportunities to make the business more efficient.