Smith & Nephew hit by Delta variant and shortages

Smith & Nephew warned annual results would be at the low end of its guidance after Covid-19 and product shortages affected its orthopaedics business in the third quarter.

Revenue rose 5.5%, or 2.3% on an underlying basis, to $1.27bn in the three months to 2 October, the medical technology group said in a trading update.

Underlying revenue at the orthopaedics division, Smith & Nephew's biggest business, fell 5.9% as the Delta variant reduced elective surgeries such as knee and hip implants in the US and a products shortage restricted sales in other markets where operations were resuming.

The FTSE 250 group said annual results would be at the low end of previous guidance for revenue growth of 10-13% and trading profit margin of 18-19%. Smith & Nephew said it would bring its orthopaedics and sports medicine franchises under one leadership team.

"Performance in orthopaedics was held back by the consequences of the Delta variant on elective surgeries, notably in the US, as well as the previously noted near-term supply constraints in some product lines," the company said.