Smith & Nephew shares rise as board updates revenue guidance
Smith & Nephew reported improved organic revenue growth across its business in its first quarter on Thursday, with revenue in the period rising 4.4% on an underlying basis to $1.2bn.
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The FTSE 100 medical equipment company said that on a reported basis, that growth was 0.5% after a negative 3.9% foreign exchange headwind.
It said all three of its global franchises accelerated in the quarter ended 30 March, delivering growth ahead of the 2018 financial year as it started to benefit from its new commercial model.
Smith & Nephew said its saw mid-teens growth from its emerging markets, led by a strong quarter in China.
On the mergers and acquisitions front, it reported “rapid” progress on its &A strategy, securing additional growth drivers and building our technology base.
It said Ceterix Orthopaedics broadened its portfolio in knee meniscal repair, and Osiris Therapeutics would accelerate its growth in advanced wound bioactives, while the Leaf Patient Monitoring System supported its pressure injury prevention portfolio and the Brainlab orthopaedic navigation business added to its digital surgery and robotics ecosystem.
The board updated its guidance for the 2019 financial year as well, saying it was “increasingly confident” that underlying revenue growth would be in the upper half of the guidance range of 2.5% to 3.5%.
Smith & Nephew said its expected trading profit margin remained unchanged in the range of 22.8% to 23.2%.
“It's been a good start to 2019 across the whole of Smith & Nephew,” said chief executive officer Namal Nawana.
“All three global franchises delivered improved organic growth as we continued to improve execution; important confirmation that each has the potential to perform sustainably at or above their markets.”
Nawana said that at the same time, the firm had made “well-judged” acquisitions that brought in new technologies to strengthen leadership positions across the business, which the directors expected to further accelerate growth over time.
“While recognising that further work remains to achieve the full potential of our portfolio, we are encouraged with our progress towards sustainably delivering above-market growth.”
As at 0925 BST, shares in Smith & Nephew were ahead 3.39% at 1,525p.