Results round-up

Smith & Nephew

Smith & Nephew reported full year sales and earnings in line with consensus forecasts as growth from the US and most emerging markets struggled to offset weakness in China and flat markets elsewhere.

With China having returned to growth in the second half of the year and other emerging markets growing at double-digit rates, the medical technology group said it expected stronger revenue growth for 2017 and an improvement in profit margin.

Guidance for reported revenue to increase by 1.2-2.2% at prevailing exchange rates and 3-4% at the underlying level as headwinds dissipate in China and the Middle East.

Trading profit margin is expected to improve by 20-70 basis points, with dilution coming as it invests in the acquired Blue Belt orthopaedic robotics-assisted surgery business and from the disposal of the gynaecology unit.

Chief executive Olivier Bohuon, who has been looking to enhance earnings by discarding ex-growth parts of the group's complex portfolio, said he felt the "right structure and capability" was now in place, with management focused on improving execution across the group.

"Beyond this, with our innovative products and deep customer relationships, we are well set to deliver a stronger performance generating higher revenue growth and a better trading profit margin in the future."

For 2016, he admitted growth was "not at the level we had wanted", after a 3% fall in the fourth quarter led to calendar-year revenue declining 1% to $4.67bn, versus consensus of $4.69bn.

Ashmore

FTSE 250 fund manager Ashmore, which focuses on emerging markets, reported a rise in pre-tax profit for the first half, thanks to favourable currency movements and higher performance fees.

In the six months to the end of December, pre-tax profit rose 94% to £121.5m, while net revenue increased 24% to £144.1m.

Net management fees pushed up to £114.9m from £98.7m, benefiting from a stronger US dollar, while performance fees rose to £21.6m from £8.6m the year before.

Assets under management fell to $52.2bn from $52.6bn during the six months, but edged up 5% from $49.4bn over the course of the calendar year as sentiment towards emerging markets continued to improve.

The company held its interim dividend steady at 4.55p.

Chief executive officer Mark Coombs said: "Emerging markets produced very strong investment returns in 2016 and delivered a 5% increase in Ashmore's AuM over the calendar year. Relative investment performance is strong with more than 90% of assets outperforming benchmarks over one year, and more than 80% over three and five years. This backdrop, together with favourable currency movements, delivered a 94% increase in Ashmore's profit before tax.