Shares in Smith & Nephew PLC (LSE:SN) plunged almost 10% after forecasting a drop in profit margins on the back of inflation and “external supply challenges".
The British medical products maker now expects trading profit margin of 17.5% for 2022 compared to a 18% margin last year.
In its 2021 full year results, published in February this year, the group targeted around a 50bps of expansion in 2022 trading profit margin and was aiming for at least 21% by 2024, “with further improvements thereafter”.
The comments came as it reported a trading profit of US$440mln for the six months to July 2, down from $459 in on the year earlier period. Revenue was US$2.6bn, up 3.5% on an underlying basis.
"Orthopaedics continues to be held back by execution and supply chain challenges", said Deepak Nath, chief executive,
The division's revenue declined 1.1% (-4.9% reported) in the second quarter due to “execution and supply chain challenges”.
Shares were trading at 1,088.00p in London, the lowest since March 2020.