Artificial knees maker launches cost-cutting programme
Shares in Smith & Nephew (LON:SN) have fallen into the red in today’s session as the company updated investors on its full-year performance, revealing a drop in attributable profits. The artificial hips and knees maker has further launched a cost-cutting plan.
As of 13:30 GMT, Smith & Nephew’s share price had given up 2.65 percent to stand at 1,213.50p underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.73 percent in the red at 7,226.06 points. The group’s shares have added just under one percent to their value over the past year, as compared with about a 0.3-percent rise in the Footsie.S&N posts results
Smith & Nephew reported today that its attributable profit had dipped to $767 million last year, as compared with $784 million in 2016. The group’s revenue meanwhile climbed to $4.77 billion, from $4.67 billion, while operating profit rose from $801 million to $934 million.
“We delivered on our promises to improve the top and bottom line in 2017. Our Knee Implants franchise delivered a standout performance and we returned to double-digit growth in the Emerging Markets,” the group’s chief executive officer Olivier Bohuon commented in the company’s results statement.
Going forward, Smith & Nephew expects its underlying revenue to increase between three and four percent, while the company’s profit margin is expected to improve by a further 30-70bps.Cost-cutting plan
The artificial hips and knees marker further announced that it had started to implement a cost-cutting programme. The programme, dubbed Accelerating Performance and Execution (APEX), is expected to deliver an annualised benefit of $160 million by 2022.
APEX, however, is forecast to also result in a one-off cash cost of up to $240 million, of which a charge of around $100 million is expected in the current year.