Shares in Smith & Nephew gained after a doubling of profits offset the unexpected exit of its chief executive.
The FTSE 100 group, which makes medical products such as bandages and knee replacements, rose 7.5 per cent, or 88.5p, to 1267.5p after its 2021 profit jumped to £437million from £218million the year before. Sales climbed 14 per cent to £3.8billion.
It came as it said Roland Diggelmann will step down by mutual agreement at the end of March.
On the mend: Smith & Nephew, which makes medical products such as bandages and knee replacements, rose 7.5% after its 2021 profit jumped to £437m
He will get a £4.5million pay-off including a year’s salary, which in 2020 was around £1.3million, and a share of the executive pension pot.
The 55-year-old has been in the role for less than three years after replacing Namal Nawana, who left amid claims he was underpaid.
Diggelmann will be replaced by Deepak Nath, the former head of diagnostics at German firm Siemens Healthineers, who will be paid £6.3million in share awards as a ‘golden hello’ and a £1.1m annual salary before bonuses.
‘It is hardly the most ringing endorsement when a company announces the departure of its chief executive and the subsequent share price gain catapults the firm to the top of the day’s FTSE 100 leaderboard, but that is what is happening,’ said AJ Bell investment director Russ Mould.
He said it could be ‘a beneficiary of anything like a return to normality’ as hospitals recover from the impact of Covid-19.
The FTSE 100 tumbled early on but rebounded to close 0.1 per cent, or 9.88 points higher, at 7494.21 while the FTSE 250 ended 0.5 per cent, or 103.86 points, down at 20993.33.
The crisis in Ukraine continued to hit sentiment, although several Russian firms were up. Steel firm Evraz rose 5.4 per cent, or 14.3p, to 281.3p while miner Polymetal added 2.8 per cent, or 30p, to 1100.5p.
Stock Watch – System1
Small-cap marketer System1 lost nearly a third of its value after a profit warning.
It said a ‘sudden and unanticipated’ drop in its sales forecasts for the US meant revenues for its fourth quarter would be over £1million lower than previously expected.
And while it was taking ‘rapid action’ to shore up its US business, profits for the year to the end of March were predicted to fall £1million short of estimates.
The update sent the shares plunging by 30.1 per cent, or 110p, to 255p.
One outlier was digger Petropavlovsk, which dropped 0.4 per cent, or 0.05p, to 13.21p as gold prices softened.
Airline Wizz Air, which serves multiple routes in eastern Europe, was also under pressure and sank 1.4 per cent, or 58p, to 3988p.
Meanwhile, troubled ecommerce firm THG fought back against speculation that brands were restricting stock deliveries.
The firm was ‘not aware’ of any suppliers reducing deliveries to its THG Beauty division despite reports that Dermalogica, a skincare brand owned by Unilever (down 1.5 per cent, or 57p, at 3793p), was doing just that. The shares fell 1.8 per cent, or 1.9p, at 101.5p.
Profits at mining giant Antofagasta more than doubled amid a spike in global copper prices.
Revenue jumped 46 per cent in 2021 to £5.5billion while profits soared 146 per cent to £2.6billion. The shares inched up 0.7 per cent, or 9.5p, to 1405.5p.
Easyjet rose 1.6 per cent, or 10.8p, to 669p amid hopes that a recovery in travel stocks could see it re-enter the FTSE 100 in next month’s reshuffle.
‘The focus on short-haul travel puts it in a better position than its long-haul rivals when it comes to capturing returning passengers, said Hargreaves Lansdown analyst Susannah Streeter, who said it could benefit from ‘pent-up travel demand’.
Engineer John Wood fell 16.2 per cent, or 36.55p, to 188.85p as it was forced to delay the publication of its full-year results.
It predicted a £74million hit from a project to build an anti-missile defence system for the US Army in Poland.
Meanwhile, United Utilities and Severn Trent were underwater after a bleak appraisal from analysts at Jefferies.
The broker demoted United to ‘hold’ from ‘buy’ and cut the target price to 1000p from 1170p, sending it down 2.4 per cent, or 25.5p, to 1032.5p.
Severn Trent slumped 2 per cent, or 57p, to 2779p after it was lowered to ‘underperform’ from ‘hold’ and its target was trimmed to 2480p from 2810p.
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