Smith & Nephew raises revenue guidance for second straight quarter
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Medical device manufacturer Smith Nephew has raised its revenue guidance for a second successive quarter, driven by strong growth in its sports medicine and orthopaedics businesses.
The third-quarter results are the last under outgoing chief executive Namal Nawana, who quit as chief executive this month after the FTSE 100 group was unable to meet his pay demands.
Mr Nawana, who will remain with the company until December to assist with a transition to the new management, will be replaced by former Roche Diagnostics boss Roland Diggelmann on Friday.
The company did not include commentary from Mr Nawana alongside its results, but chief financial officer Graham Baker said the results represent “a further step towards growing at or above our markets.”
Revenues rose 4 per cent to $1.246bn in the three months to the end of September, and the FTSE 100 company nudged its expectations for full-year underlying revenue growth up to a range of 3.5 per cent to 4.5 per cent, up 50 basis points.
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The group pointed to particularly strong performance at its sports medicine unit, which includes lines such as knee and shoulder repair and saw underlying revenue growth of 6.9 per cent — a third consecutive quarter of double-digit growth.
The orthopaedics franchise, which includes products such as knee and hip implants, reported growth of 3.4 per cent.
Geographically, emerging markets sales jumped 16 per cent as China delivered “stand out performance.”
However, the group warned it expects its trading profit margin to be around 22.8 per cent, which is at the lower end of the previously guided range.
Smith & Nephew said: “this reflects our decision to continue to invest in opportunities to support medium-term growth” as well as minor foreign exchange fluctuations and dilutions from its recent acquisition spree.
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