31st Oct 2019 09:30
(Alliance News) - Smith & Nephew PLC on Thursday lifted its annual underlying revenue guidance for a second time in 2019 due to a "sustained improved performance," as it reported 6.5% growth in third quarter revenue.
The medical technology business said benefits of acquisitions outweighed currency headwinds and resulted in USD1.25 billion revenue for the three months to September 28, up 6.8% from USD1.17 billion a year ago.
The company's Orthopaedics division saw a 3.6% year-on-year growth in quarterly revenue to USD524 million on continuation of good trading momentum. The Sports Medicine & ENT business saw 5.9% growth in revenue to USD365 million, while the Advance Wound Management division recorded 12% revenue growth to USD357 million.
"We've built momentum across the first nine months of the year and, at the same time, continued to invest behind our commercial teams and acquisitions to support sustained success over the medium-term. As a result, we're confident to increase 2019 revenue guidance again," Smith & Nephew Chief Financial Officer Graham Baker said.
The London-based company, which produces knee and hip implants, now expects 2019 underlying revenue growth in the range of 3.5% to 4.5% for 2019. Previously, it anticipated underlying revenue to grow between 3.0% and 4.0%, which was raised from an initial 2.5% to 3.5% range.
Trading margin, however, is now expected to be around 22.8%, which is at the lower end of the previously guided 22.8% to 23.2% range.
"This reflects our decision to continue to invest in opportunities to support medium-term growth, dilution from the acquisitions, and a small foreign exchange headwind in the second half of 2019," Smith & Nephew said.
Earlier in October, Smith & Nephew appointed former Roche Holdings AG executive Roland Diggelmann as its new chief executive officer, effective November 1. Diggelmann will succeed Namal Nawana, who is stepping down on Thursday "to pursue other opportunities outside of the UK".
Smith & Nephew shares were up 0.4% early Thursday in London at 1,721.50 pence each.
By Tapan Panchal; [email protected]
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