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New Smith & Nephew boss gives bullish assessment of artificial hip maker’s health

Namal Nawana’s upbeat comments came as Smith & Nephew reported a 4% rise in half-year revenue, confirmed its cost-cutting strategy is progressing well and reiterated full-year guidance
namal nawana, smith and nephew CEO
Nawana took over from Oliver Bohuon in May

New Smith & Nephew PLC (LON:SN.) boss Namal Nawana has given a bullish assessment of the artificial hips and knees maker’s health.

Having had the chance to take a more in-depth look under the bonnet, Nawana, who joined in May, was full of praise for the FTSE 100 group’s products and technology.

READ: Smith & Nephew cuts full-year forecasts after weak Q1

“In my first few weeks at Smith & Nephew I have reviewed our businesses and operations and validated that we have an excellent product portfolio with numerous best-in-class medical technologies,” said the 47-year-old.

“We are now focused on energising and organising the business to accelerate growth.”

Nawana’s upbeat words came as Smith & Nephew reported a 4% rise in first-half revenue to US$2.44bn (H1 17: US$2.34bn). Excluding a small currency gain, underlying revenue rose 2%.

China was one of the standout performers, registering double-digit growth, while the group also reported “improved dynamics” in its hips and knee implants business.

Efficiency drive on track

Operating profits fell to US$372mln (H1 17: US$414mln) as margins dipped 240 basis points to 15.3%, reflecting US$58mln of costs related to the APEX programme – the cost-cutting strategy designed to save the company US$160mln a year by 2022.

Smith & Nephew declared an interim dividend of 14.0 US cents per share, up from 12.3 cents a year earlier.

For the full year, the £12bn company repeated its reduced full-year guidance for underlying revenue growth of between 2-3%, with margins at or above the 19.6% it achieved last year.

Shares leapt 4.5% to 1,380p at the opening bell in London.

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