BUSINESS LIVE: Food price inflation slows; Abrdn profits dip; Smith & Nephew eyes margin gains

British medical equipment maker Smith & Nephew expects profit margins to improve in 2024 after beating market expectations for 2023 earnings, driven by robust sales at its orthopaedics and wound management segments.

The company, which makes orthopaedic implants and prosthetics, wound dressings, and other surgical technologies, said its trading profit margin for 2024 was expected to be at least 18 per cent, higher than the 17.5 per cent achieved in the previous year.

Medical equipment makers have witnessed strong demand as people, especially older adults, return for elective surgeries such as joint replacements deferred during the pandemic.

Smith & Nephew’s trading profit came in at $970million for the year ended 31 December, compared with the average analysts’ expectation of $966million, according to a company-provided consensus.

The company expects revenue to increase 5 to 6 per cent on an underlying basis in 2024, compared with the 7.2 per cent growth achieved in the previous year.

Abrdn has reported a dip in full-year operating profit for 2023, as it pursues deep cost cuts to revive performance.

The British fund manager reported adjusted operating profit of £249million for the year, down 5 per cent on £263million the previous year and in line with forecasts of £242million.

The Edinburgh-based fund firm also announced a full-year dividend of 14.6 pence per share, unchanged on 2022.

Abrdn laid out plans to cut 500 roles in January, after worse than expected net outflows of client cash in the second half of 2023. Net outflows for the year were £13.9billion, compared to £10.3billion of outflows in 2022.

One of Britain’s best known fund management firms, Abrdn has suffered years of clients pulling cash and has fallen out of Britain’s blue chip FTSE 100 stock index.

Chief executive Stephen Bird is attempting to drive a turnaround by shedding jobs, reducing its range of funds and expanding into mass-market investing, following the takeover of online platform interactive investor in 2022.

Food inflation has slowed to its lowest rate since May 2022 amid easing energy and fertiliser costs and fierce competition among retailers, figures have revealed.

Food prices were 5 per cent higher than a year ago in February – a marked drop from January’s 6.1 per cent and below the three- month average of 6 per cent, according to data from the British Retail Consortium (BRC)-Nielsen Shop Price Index.

Price drops for meat, fish and fruit helped to drive a slowing of fresh food inflation to 3.4 per cent from January’s 4.9 per cent, well below the three-month average of 4.6 per cent and the lowest since February 2022.