MARKET REPORT: Return of patients boosts bandage maker Smith & Nephew

MARKET REPORT: Return of patients for regular surgery after the pandemic boosts shares in bandage maker Smith & Nephew

Shares in Smith & Nephew surged as a rebound in surgical procedures following the pandemic boosted its fortunes.

The FTSE 100 firm, which makes bandages as well as hip and knee replacements, rose 3.4 per cent, or 43.5p, to 1312p after reporting revenue of £1billion for the three months to April 2, a 3.3 per cent rise year-on-year.

It enjoyed ‘strong growth’ from its sports medicine and ear, nose and throat businesses and an improved performance in orthopaedics.

Smith & Nephew, which makes bandages as well as hip and knee replacements, rose 3.4% after reporting revenue of £1bn for the three months to April 2, a 3.3%  rise year-on-year

Its advanced wound care segment, which includes medical dressings and pain relief gels, also saw revenues rise 8 per cent as it was boosted by sales in Europe.

Smith & Nephew noted that elective surgeries had recovered at the start of the quarter as hospitals began planning procedures again rather than focusing on treating Covid patients.

Sports medicine joint repair demand rebounded after a hit from fewer events took place during the pandemic.

Boss Deepak Nath hailed the ‘encouraging start’ to the year while the firm left its forecasts for 2022 unchanged.

The FTSE 100 gained 1.1 per cent, or 83.58 points, to 7509.19 while the FTSE 250 jumped 0.9 per cent, or 181.85 points, to 20,619.62.

Some of the biggest hitters helped, with HSBC rising 1.6 per cent, or 7.75p, to 494.05p following strong results from its fellow Asia-focused rival Standard Chartered (up 14.2 per cent, or 67.9p, at 547.6p).

Lloyds added 1.2 per cent, or 0.54p, to 46.31p after analysts at Bank of America upgraded the stock to ‘buy’ from ‘neutral’ and upped their target price to 57p from 46p. Lloyds also won price hikes from UBS, RBC and Deutsche Bank.

Stock Watch – VP 

VP shot higher after putting itself up for sale.

The construction equipment and vehicle hire firm said a company linked to its chairman Jeremy Pilkington, and which owns a controlling stake, had told the board it planned to sell its holding.

As a result, VP was seeking a buyer and launched a formal sales process. 

It said it had yet to receive an approach and there was no guarantee of an offer being made.

The shares rose 14.6 per cent, or 120p, to 940p.

Mining giant Glencore rose 0.8 per cent, or 3.75p, to 483.5p after predicting earnings from its trading business would ‘comfortably’ exceed expectations as it cashed in on wild price swings in commodity markets caused by war in Ukraine. 

That offset a cut to full-year production targets for copper, cobalt and zinc as it grappled with difficult ground conditions.

Wealth manager St James’s Place slipped 0.3 per cent, or 3.91p to 1278.5p after recording a drop in funds under management in the first quarter. It was looking after £154billion but this fell to £151billion by the end of March.

Recruiter Hays jumped 3.2 per cent, or 3.7p, to 121p after unveiling plans for a £75million share buyback, as it said business remained ‘highly cash generative’, and reiterated a commitment to return surplus funds to shareholders.

Pharma giant AstraZeneca received another regulatory boost after a drug was approved for use in the US. Ultomiris treats myasthenia gravis, a rare autoimmune disorder that stops muscles from working properly. 

Shares rose 0.5 per cent, or 50p, to 10,562p. Mexican gold miner Fresnillo received a mixed assessment from analysts, with JP Morgan cutting their target on the stock to 850p from 900p while Jefferies increased theirs to 810p from 790p.

The shares fell 0.5 per cent, or 4.21p, to 770.4p after it went ex-dividend.

Kitchen fitter Howden Joinery was up 1 per cent, or 7.4p, to 777.4p after it reported revenues in the four months to April 16 rose nearly 22 per cent year-on-year as it increased prices. It remained ‘on track’ to hit its full-year outlook.

Schroders reported a rise in assets under management in the three months to the end of March – to £753billion from £732billion. 

However, the shares dipped 0.9 per cent, or 26p, to 2842p as the value of its mutual funds fell to £110billion from £116billion at the end of December.

Meanwhile, car dealer Inchcape soared 6.4 per cent, or 42.50p, to 708.5p after forecasting a 25 per cent surge in profits for 2022 to at least £300million. 

It reported revenues of £1.8billion for its first quarter, 13pc higher than the same period a year ago.