Birmingham Hip maker sees strong Q1 despite replacement fears

MEDICAL technology group Smith & Nephew, whose UK orthopaedics operation is based at Warwick Technology Park, has seen first quarter revenues and profits rise despite its Birmingham Hip implant business being tainted by fears following the problems associated with metal-on-metal replacement operations.

In a Q1 trading update, the group said: “Revenue from our global Hip Implant franchise was down -2%.  This was largely a result of continuing headwinds in the metal-on-metal total hip replacement sector.  

“Sales of our Birmingham Hip Resurfacing System continued to suffer from association, despite its strong track record demonstrated by many independent sources of data which have proved its performance over more than 10 years.”

Overall, the firm said Q1 had delivered a good financial performance, with revenue rising to £665m ($1,079m), representing 3% growth on an underlying and 2% on a reported basis year-on-year.

Both the Advanced Surgical Devices and Advanced Wound Management global divisions grew revenue, profit and trading profit margins in the quarter.  

Trading profit was £155m ($252m), up 5% on 2011.  This was ahead of expectations. The group said the improvement was is in part a reflection of the actions it had taken in reshaping its operations.

Olivier Bohuon, CEO of Smith & Nephew, said: “Smith & Nephew has had a good first quarter.  We grew revenue, increased profit and improved our trading profit margin.  We saw the first results of our actions to make Smith & Nephew more fit and effective.
 
“2012 is a critical year for implementing our new strategic priorities. Our plans to progress the structural changes, additional investments and, of course, greater efficiencies, are now underway.  Throughout Smith & Nephew, at every level, there is a clear sense of direction, as we work to reshape the Group for future growth.”