John Robinson, the chief executive, said: "We have had no approaches and no discussions with anybody. We can see no basis for the rumours." The shares, which have outperformed the rest of the market by 15 per cent over the past year, closed 5p lower at 190p as Smith also announced its interim figures.
The consensus is that if Johnson is to swoop it will have to move soon, before the British company has a chance to show it has put problems behind it.
Underlying profits growth of 6 per cent in the six months to July confirmed Smith's relative resilience to the pricing pressures that have dogged the pharmaceutical industry but analysts were disappointed that the days of the late 1980s, when Smith & Nephew recorded steady 20 per cent a year growth, showed no signs of returning. Mr Robinson said the company was on track to achieve its target of having a 15 per cent market share, or being one of the top three players, in all its markets.
Operating margins edged up for the second year running as Smith benefited from its leading position in many healthcare markets and its geographical diversity, which sees 80 per cent of sales made overseas. Return on sales was held despite raw material cost increases in packaging and cotton, which added pounds 3m to the cost base.
Reported profits bounced back from a pounds 65.8m loss in the first half of 1994 to a pounds 73.1m profit as the effect of last year's pounds 148m charge to cover withdrawing from Ioptex, a disastrous US lens acquisition, washed through.
Strongest growth came in Britain, where Smith has started to reap the rewards of pushing all its products through a single marketing operation. The company said that had boosted sales to large buyers.
Elsewhere in Europe, government pricing pressures in France and general economic difficulties in Spain, as well as a doctors' strike, left markets flat. America continued to grow despite increasing competition, and Japan, where Smith has no indigenous competition for many products, was buoyant.
Investment Column, page 16