Smith & Nephew expands in emerging markets

BRITISH MEDICAL products maker Smith & Nephew forecast full year revenue growth in line with analysts’ expectations, as it looks to grow in emerging markets and expand its product lineup.

The group, which has an advanced wound care management division in Hull, has been under pressure to improve margins and find new sources of growth as it competes with bigger rivals such as Stryker Corp, Zimmer Biomet Holdings and Johnson & Johnson.

The medical technology firm, forecast 2019 profit margins of between 22.8 per cent and 23.2 per cent and revenue growth of between 2.5 per cent and 3.5 per cent, largely in line with estimates.

Smith & Nephew’s established markets, including the United States from where the company gets about half of its revenue from, had returned to growth following a tough start to 2018, but have now slowed as the market saturates. Emerging markets, especially China, however, are growing.

Revenue edged up 1.3 per cent to £999.61m from a year earlier, just short of average analyst forecasts, according to a companyprovided consensus.

This followed a slowdown in growth in established markets and the firm was also hit by a stronger dollar.

Smith & Nephew’s operating profit for fiscal 2018 fell 7.6 per cent.

The company also said that the UK’s decision to leave the European Union will not have any significant impact on its long-term ability to conduct business in the region.

Analyst Adam Barker at Shore Capital said: “Advanced wound management delivered 2 per cent underlying growth, with a strong performance from Advanced Wound Devices.”