Smith & Nephew reports solid first half, announces $500m buyback
By Josh White
Date: Tuesday 05 Aug 2025
(Sharecast News) - Smith & Nephew reported robust results for the first half of 2025 on Tuesday, with revenue, profit and cash generation all improving significantly, and unveiled plans for a $500m share buyback to return surplus capital to shareholders.
The FTSE 100 medical technology firm posted revenue of $2.96bn for the six months ended 28 June, up 4.7% on a reported basis and 5% on an underlying basis.
Operating profit rose 30.6% to $429m, while earnings per share increased 36.6% to 33.5 cents.
Trading profit rose 11.2% to $523m, with the trading margin improving to 17.7% from 16.7% a year earlier.
Second-quarter revenue came in at $1.55bn, up 7.8% year-on-year, or 6.7% on an underlying basis.
All regions and business units grew faster than in the first quarter, with Advanced Wound Management leading the way with underlying growth of 10.2%.
Orthopaedics grew 5% and Sports Medicine and ENT increased 5.7% on the same basis.
Free cash flow surged to $244m in the first half, up from $39m in the prior year, driven by improved working capital and lower restructuring charges.
Cash generated from operations rose 54.3% to $568m.
"We are delivering sustained higher revenue growth, increased profitability and better cash generation," said chief executive Deepak Nath.
"As expected, revenue growth accelerated in the second quarter, with all regions and business units contributing."
He added that recent product launches had been a key driver of performance, with US Hip Implants among those contributing to growth.
Nath said the company's operational improvements, part of a broader '12-point plan' transformation strategy, were "increasingly translating into better financial performance".
"We are on track for our full year revenue growth target, a significant step-up in profitability and strong free-cash generation, and are announcing a $500m share buyback," he added.
"There is more to be done, but the transformation of Smith & Nephew is starting to deliver substantial value."
The share buyback, to be carried out in the second half of the year, would be executed by JPMorgan Securities, which had been appointed as riskless principal.
Smith & Nephew said the repurchased shares would be held in treasury and may later be cancelled or used to satisfy employee share plans.
The programme would run from 5 August to 31 December, and would be subject to regulatory limits and market conditions.
Smith & Nephew also increased its interim dividend by 4.2% to 15 cents per share and maintained its full-year guidance, with underlying revenue growth expected to be around 5% and the trading margin forecast to rise to between 19% and 20%.
At 0928 BST, shares in Smith & Nephew were up 15.38% at 1,330.5p.
Reporting by Josh White for Sharecast.com.
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