Smith & Nephew Results Hold Up Despite Joint Pain

Smith & Nephew plc has announced its results for the second quarter ended 29 June 2013 and the revenue growth was a modest 3% on an underlying basis. The top line growth figure would have been stronger had it not been for the plain fact that the company’s hip and knee business dragged its surgical unit sales down from last year’s $774m to this year’s $741m. In fact the sports med component reportedly held up well, so the total joints must have suffered a hefty slump. Indeed for the year to date, surgical devices were down to $1501m from last year’s $1613m.

Having poured a bit of cold water on the total joint numbers, which were admittedly expected, it’s noteworthy that its silver lining comes in the form of very healthy figures from the Advanced Wound Management business. Revenue of $333m vs last year’s $255m for the quarter and $648m vs $495m for the year came from strong above market performances from S&N’s bioactives and negative pressure wound therapy businesses.

The group reported trading profit of $232 million in the first half, up 1 percent on an underlying basis, on revenue of $1.07 billion. Adjusted earnings per share reached 18 cents, meeting market expectations and fuelling a healthy share price which spiked briefly at 795p before dropping back to 780p at the time of writing.

Coupled with strong performances from the newly targeted emerging and international markets the company is sounding pretty punchy about its prospects.

Company comments

Olivier Bohuon, Chief Executive Officer of Smith & Nephew, said; “The on-going implementation of our Strategic Priorities underpinned our performance in the quarter. We generated stand-out contributions from our areas of focused investment in the Emerging and International Markets and Negative Pressure Wound Therapy. As expected Orthopaedic Reconstruction had a slow quarter and we anticipate a better second half. Our major acquisition, Healthpoint Biotherapeutics, completed an excellent first six months as a Smith & Nephew business.

Source: Smith & Nephew plc