Revenues hit as medtech business grapples with pandemic’s impact

Medical equipment manufacturer, Smith+Nephew, has seen its reported full year revenue drop more than 11% from $5.1m/£3.7m to $4.5m/£3.2m.

The listed Hull-based business has released both its fourth quarter and full year 2020 results, in which it says it has been effectively managing the unprecedented disruption inflicted by the pandemic.

In its full year figures, the company made a pre-tax profit of $246,000/£177,000, down from $743,000/£536,000 the previous year.

Group trading profit was $683m/£493.2m in 2020 (2019: $1,169m/£837,000). The trading profit margin was 15% (2019: 22.8%).

The company’s quarter four revenue was $1.3m/£938,000 down -5.8% reported and -7.1% underlying, as new COVID-19 restrictions hit elective surgeries in many of its markets.

Smith+Nephew added the quarter four slowdown was less severe than the decline in quarter two, as healthcare systems adapted to manage COVID-19 patients while maintaining some level of elective surgeries.

A spokesman for the business said: “Throughout the year we prioritised the health and safety of employees, continued to support our customers and communities, and at the same time undertook important work to strengthen the Group.

“This included record investment in R&D, launching multiple new products including digital and robotic surgical systems, and making strategic acquisitions in higher growth segments such as extremities.

The combination of the lower revenue and the sustained commitment to investment, including the increase in R&D, had an impact on margin, and consequently earnings, for the year.”

Roland Diggelmann, chief executive officer, said: “In 2020 we continued to strengthen Smith+Nephew through increased investment in R&D, new product launches and strategic acquisitions in our higher growth segments.

“We achieved this while also managing unprecedented disruption from COVID-19.

“The resilience of the business and strength of the balance sheet also meant we are able to maintain our progressive dividend policy.

“We start 2021 with three clear priorities: to return to top-line growth and recapture momentum; to drive further operational improvement; and to continue to respond effectively to COVID-19.

“We will build on the progress we are starting to make in areas where we have recently invested and introduced innovation.

“We will again invest more in R&D and I am excited by the pipeline of new technologies approaching launch, and by the potential of our recent acquisitions.”