City briefs: Smith & Nephew; Proactis; and Tracsis
Medical equipment manufacturer Smith & Nephew has reported full year revenue of $5,138m/£3,982m (2018: $4,904m), up 4.4% on an underlying basis.
The listed, Hull-based business, has released its full year 2019 results.
All three of the company’s global franchises delivered an improved revenue growth performance in 2019 over the prior year.
Its orthopaedics franchise delivered 4% underlying revenue growth (2018: 3%), Sports Medicine & ENT achieved 7% underlying revenue growth (2018: 2%), and Advanced Wound Management delivered 2.2% underlying revenue growth (2018: 0%).
Group trading profit was $1,169m/£906,436 in 2019 (2018: $1,123m).
In its 2020 outlook, the business said its underlying revenue growth is expected to be in the range of 3.5% to 4.5% (around 4% to 5% reported).
Roland Diggelmann, chief executive officer of Smith & Nephew, said: “The improved underlying revenue growth of 4.4% in 2019, the best for several years, has propelled Group sales above $5 billion for the first time in Smith+Nephew’s history.
“All franchises and regions meaningfully contributed to this record.
“At the same time, we’ve continued investing to drive mid-term growth, both increasing our R&D spend, and also bringing in innovative technologies and expertise through acquisitions.
“For 2020, our focus is on sustaining the positive momentum and our strategic imperatives remain the right path to value creation.”
Smith & Nephew has also published its fourth quarter 2019 trading update. This records revenue of $1,407m/£1,091m (2018: $1,294m), up 5.6% on an underlying basis.
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Global spend management firm Proactis, which is based in Wetherby, expects to report revenues of about £24.5m for the six-month period ended 31 January 2020 (six-month period ended 31 July 2019: £26.4m).
Also in its latest trading update, the firm says total contract value signed with new and existing customers was £7.5m for the same period, a 44% increase against the six-month period ended 31 July 2019 of £5.2m.
Its update adds: “This rate of new business performance is expected to continue during February and the Group is well positioned to take this performance further in the mid-term.
“The reduction in reported revenue is principally a reflection of the significant net loss of annualised recurring revenues during the two prior financial years ended 31 July 2019 and 31 July 2018.
“The Group has invested in new leadership, sales, marketing and account management teams required to deliver our new go-to-market strategy designed to boost new business and customer retention for the longer-term.
“Following the significant improvement in new business performance and retention of existing customers, the Board expects the Group will return to revenue growth for the second half of the financial year resulting in a likely full year outturn of approximately £50.5m for the year ending 31 July 2020.”
Tim Sykes, CEO, said: “I am delighted with the record level of new business that the Group has achieved and the pipeline that we have built over recent months as we execute our new strategy for growth.
“Our customer retention rates have improved significantly which is partly due to our increased level of engagement with our customers where we are offering product strategies designed to maintain and, potentially, provide even more value.
“Our revenue performance in the period is largely a function of the lower new business and much lower retention performance in previous periods which we have now reversed. I am also encouraged that we were able to reduce net debt and we remain highly focused on and in control of this key aspect of our strategy.
“We are confident that the revenue performance has now bottomed out and we have much to be optimistic about as we re-emerge to growth in our core offer after a very difficult period in the Group’s history.”
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Tracsis, a Leeds-based provider of software, hardware and services for the transport industries, says its group revenues are well ahead of last year’s results.
In its trading update for the six months ended 31 January 2020, the company posts revenues of over £26m (2019: £18.8m).
EBITDA and Adjusted Profit are also expected to be ahead of the previous year (2019: EBITDA £4.2m, 2019: Adjusted Profit £3.9m).
The update adds: “Our Rail Technology & Services division has traded well, benefiting from high levels of recurring software revenue, and also income from multi-year contract wins from previous years.
“All our rail businesses have been involved in major tenders, which if successfully secured, will pave the way for further organic growth.
“As highlighted previously, the Group continues to invest heavily in our technology base, and continues to make good progress developing the next generation of products for the transport industry.
“The Group continues to review acquisition opportunities particularly in the Rail Technology & Services division as we seek to judiciously use cash balances to fuel growth.”
Interim results for Tracsis will be announced on 2 April 2020.
