Hip replacement firm Smith & Nephew’s profit surges amid recovery in US sales
The medical technology giant has been in the midst of a turnaround effort, and recently faced calls from its top investors to break the company up.
Profits at hip replacement making giant Smith & Nephew have jumped after a rebound in its US business.
The medical technology giant, which is listed on the FTSE 100, has been in the midst of a turnaround effort, and recently faced calls from its biggest investors to break the company up.
Late last year, its top 20 shareholders demanded that bosses consider spinning off the company’s orthopaedics business, which makes replacement hip and knee joints.
That came after a profit warning in October, when bosses complained of poor sales in China, which had resulted in the company’s distributors sitting on unusually high levels of unsold products.
But chief executive Deepak Nath said on Tuesday the company is now making more cash despite “significant sector-wide headwinds”.
He said this was partly down to “leverage and productivity improvements” across the business, while the company has also been more disciplined on spending.
Shares in the group jumped 9% on Tuesday morning.
Since the profit warning, revenues for the final three months of 2024 jumped 7.8%, helping push Smith & Nephew to a 657 million dollar (£520 million) profit.
That figure is up 55% on the previous year, which the company said recent product launches made a big contribution to.
Smith & Nephew’s business lines include orthopaedics, where it makes high-tech knee and hip implants used to replace damaged or worn joints.
It also makes products used in sports surgery, as well as for treating ear, nose and throat conditions.
Mr Nath said more than 60% of the company’s revenue growth last year came from products launched in the last five years.
He added: “We have launched nearly 50 new products over the last three years and have an exciting pipeline for 2025.
“There is much more to be done, but we have made solid progress fixing the foundations and expect a step-up in returns in 2025, including significant margin expansion.
“We are confident that this will be the year when transformation starts to unlock substantial value for our shareholders.”
