Equity update: Smith & Nephew showing signs of recovery beating expectations 

Mark Crouch, analyst at investment platform eToro, says “Following an extended period of underperformance, Smith & Nephew set out a “12 point plan” to shareholders last year in a bid to improve productivity, strengthen profit margins and overhaul the company’s orthopaedics group which has seen its market share begin to slip in recent years. This morning’s earnings report suggests the plan is starting to pay off.

“The British medical equipment manufacturer reported full year trading profit up 7.6% to $970m, compared to $901m in 2022, mainly driven by robust sales at its orthopaedics and wound management segments, and while improving their strained margins remains a challenge, the group does expect margins to increase in 2024.

“Shareholders have witnessed a 25% rally since November and despite sticky inflation impeding the company’s progress, this set of results may reassure investors that Smith & Nephew are on the road to recovery.”

Croda, Abrdn slide after trading updates

Mark Crouch, analyst at investment platform eToro, says: “Croda is today’s biggest loser in the FTSE 100, shedding close to 6% by early afternoon. The specialty chemicals firm announced a pro forma drop of 11% in sales as part of its full year results and warned of a weak outlook for demand in its Industrial Specialties division.

“FTSE-250 component Abrdn whipsawed in a volatile session sparked by its fourth-quarter earnings and details of how it is progressing with its “transformation programme” – a series of deep cost cuts first announced last month, by which the company hopes to improve its fortunes. The asset management firm initially climbed over 6%, after announcing they had exceeded their cost reduction target. Net outflows grew substantially from 2022, though, and the company warned of further headwinds from changing client demand; its share price eventually gave up all its gains, sliding 3% into the red by the afternoon in London.”