Hip replacement concerns continuing to impact Smith & Nephew
MEDICAL technology group Smith & Nephew, whose UK orthopaedics operation is based at Warwick Technology Park, has said concerns over hip replacement operations is continuing to impact on its business.
In an interims results statement, the company said its Birmingham Hip implant business remained tainted by fears following the problems associated with metal-on-metal replacement operations.
“Our Hip Implant franchise continued to feel the effects of negative commentary in the metal-on-metal total hip replacement sector, with the decline in sales of our Birmingham Hip Resurfacing System increasing quarter on quarter, despite its excellent clinical record. Revenue across the franchise was down -5%, against a market up 2%,” it said.
Smith & Nephew said half year revenues had come in at $2,108m (£1,344m), with underlying growth up 3% compared to the same period last year, although this excluded a -2% currency headwind and a negative 2% impact as a result of its Bioventus transaction.
Reported trading profit for the six month period was $486m (£310m), which compared with $477m for the same period last year.
In outlook, the company said: “We are performing in line with our expectations and our guidance for the full year, provided in February 2012, is unchanged. Emerging market economies have continued to perform strongly and the US is showing some signs of stabilisation, although we are not immune to the impacts of the macroeconomic uncertainties and continuing challenging economic environment across Europe.”
Olivier Bohuon, Smith & Nephew CEO, said the business continued to generate top-line growth and had delivered an improved trading profit margin.
“This demonstrates the early benefits of our actions to reshape the group to provide the right commercial models, innovation and efficiencies required to win in our markets today and in the future,” he said.
“We have consistently delivered revenue and earnings growth and strong cash generation in the challenging markets of the last few years. This financial strength, and our confidence in delivering against our Strategic Priorities, has enabled us to increase substantially our dividend pay-out, whilst keeping the flexibility to meet our organic and inorganic growth objectives.”
