Smith & Nephew limps to lower end of target despite stronger hips

Despite the impact of Hurricanes Irma and Harvey in America, revenues were grown 3% to $1.15bn in the three months to 30 September, taking the top line for the year to date to $3.49bn, which is only 1% higher than at the same stage last year, or 3% on an underlying basis.

As a result, management expect underlying revenue growth for the full year to be at the lower end of their earlier 3-4% guided range, with profit margins also dragged down to the lower end of the 20-70 basis points range.

Chief executive Olivier Bohuon, who last month announced his intention to retire by the end of next year, highlighted that the "sustained nature of the market-beating growth" of the knee implants unit and the strong emerging markets recovery across the year.

"We delivered 3% revenue growth in the quarter, in-line with guidance despite the recent natural disasters in the Americas delaying some procedures."

Smith & Nephew grew sales 1% from its established markets, with the US up 2% underlying to $545m and other established markets up 3% to $412m and emerging markets jumping 9% to $195m.

Looking at the quarter by each of the group 'franchises', gainers included sports medicine up 8%, other surgical businesses were up 6%, reconstruction was up 4% and knees continued to jerk higher and hips returned to growth, wound bioactives were up 7% and wound devices up 8%.

Declines were sustained at arthroscopic technologies, which fell 3%, trauma & extremities dropped 2% and advanced wound care was down 1%.

"Looking ahead," said Bohuon, our focus on accelerating the top-line is unchanged and we are also starting the next stage in our continuing drive to improve efficiency across the Group. I am as determined as ever to keep pushing for further success, and to leave Smith & Nephew an even better company."