Smith & Nephew (SN.) chief executive Olivier Bohuon expects the 2016 financial year to be a period of strong growth for the company, following the completion of three acquisitions in 2015. Its plans for the rollout of new products include new knee joint replacement technology and an improved version of its Renasys wound care product, which faced regulatory issues last year.
While turnover was flat for the reported period, this heavy investment in dealmaking has hit the group's bottom line. But excluding the integration costs and impairments of the new businesses, as well as legal costs following the Renasys battle, underlying operating profit was actually up 4 per cent at $1.1bn (£0.75bn).
Like both GlaxoSmithKline (GSK) and AstraZeneca (AZN), Smith & Nephew struggled against unfavourable exchange rates last year; but after stripping out the currency movements, sales actually grew 4 per cent. This was driven largely by the excellent performance of the group’s sports medicine franchise and good growth in the US and emerging markets.
Prior to these numbers, brokers at Numis Securities were expecting EPS of 92.9ȼ in the 2016 financial year, rising to 101.2ȼ for the financial year ending 31 December 2017.
| SMITH & NEPHEW (SN.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,110p | MARKET VALUE: | £10bn | |
| TOUCH: | 1,110-1,111p | 12-MONTH HIGH: | 1,217p | LOW: 1,046p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 35 | |
| NET ASSET VALUE: | 442ȼ* | NET DEBT: | 34% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
|---|---|---|---|---|
| 2011 | 4.27 | 848 | 65.3 | 17.4 |
| 2012 | 4.14 | 1,092 | 80.4 | 26.1 |
| 2013 | 4.35 | 802 | 61.7 | 27.4 |
| 2014 | 4.62 | 714 | 56.1 | 29.6 |
| 2015 | 4.63 | 559 | 45.9 | 30.8 |
| % change | -22 | -18 | +4 | |
Ex-div: 21 Apr Payment: 11 May *Includes intangible assets of $3.51bn, or 392ȼ a share £1 = $1.46 | ||||
