6th Feb 2014 08:46
LONDON (Alliance News) - Smith & Nephew PLC Thursday raised its full-year dividend despite a decline in pretax profit, as the medical products firm saw revenue rise in the full year ended December 31, 2013.
Smith & Nephew announced a final dividend of 17.0 US cents, bring its full year dividend to 27.4 cents, up 5.0% from 26.1 cents the previous year.
The medical technology company achieved revenue of USD4.35 billion, up from USD4.14 billion in the previous year. Pretax profit was USD802 million, down from USD1.09 billion in the previous year.
In the fourth quarter Smith & Nephew saw revenue of USD1.18 billion, up 6% from USD1.08 billion in the previous year, meeting analyst expectations provided by the company of a range between USD1.11 billion and USD1.20 billion.
The decline in pretax profit was due to increases in research and development costs, selling and general administrative expenses, and a USD251 million profit on the disposal of net assets held for sale in the previous year.
The company said it expects the market conditions it saw in the second half of 2013 to continue into 2014, with the US to show signs of improvement, Europe to remain challenging, and emerging markets to continue to be an opportunity for growth.
The company saw an improved performance from its Orthopaedic Reconstruction business, saying it had seen 11% growth in its US Knees business. In the US revenue rose 1%, although it declined 3% in its other Established markets. This was offset by 18% growth in the company's Emerging & International markets.
The company posted a trading profit margin of 22.7%, and said it expects to exceed its 2013 performance in trading profit margin.
The company announced on Monday that it had acquired ArthroCare Corp. for USD1.7 billion. Whilst the acquisition price was a 20% premium over the 90-day volume-weighted average price for ArthroCare, it was just a 6% premium over its last closing price. In a call with journalists Thursday morning, Chief Executive Officer Olivier Bohoun said that he felt Smith & Nephew were acquiring ArthroCare at the right price, and would not have made the offer if it did not think it was suitable.
Shares in Smith & Nephew were trading up 1.9% at 891.50 pence early Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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