Smith & Nephew cautious for year ahead

EUROPE’S largest medical devices firm, Smith & Nephew which manufactures the pioneering Birmingham Hip Resurfacing system, today reported a 9% rise in its fourth quarter net profit.

The position has been helped by a drive to improve margins by cutting costs and seeking new markets.

However, the firm issued a note of caution by stating in its full year results statement today that the pace of recovery for replacement hips and knees was still uncertain despite showing signs of stabilising.

It has also said it expects prices to remain challenging in the year ahead as governments and insurers fought to keep healthcare costs as low as possible.

The company said net profit rose to $128m from $117m compared with 2008. Trading profit came in at $254m, which was in line with the higher end of estimates.

In its drive to cut costs, Smith & Nephew has been closing some of its overseas offices and switching production to low cost countries such as China.

It said sales of replacement hips and knees slowed last year mainly due to people putting off operations.