By Prerna Bedi
(Reuters) – UK’s Smith+ Nephew on Thursday forecast annual revenue growth at the higher end of its guided range of 6-7% and named ad group WPP’s former finance boss John Rogers as its new chief financial officer.
Strong sales from wound management and orthopaedics are likely to drive up underlying revenue growth for 2023, above analysts’ average expectations of 6.4%, the company said.
Rogers, who also held the position at grocery retailer Sainsbury’s, will replace Anne-Françoise Nesmes as CFO designate in December before assuming full responsibilities in the first quarter of 2024.
Nesmes had announced her intention to step down from the role in August.
The company is Britain’s largest medical products manufacturer by market capitalisation, producing orthopaedic implants and prosthetics, wound dressings and other surgical technologies.
It posted an 8.5% rise in revenue to $1.36 billion for the three months ended September 30. Analysts, on average, had expected revenue of $1.34 billion.
Orthopaedics is the largest product segment, and CEO Deepak Nath told Reuters the division could benefit from powerful weight loss drugs such as Novo Nordisk’s Wegovy, as more people who are currently overweight for a knee procedure become more eligible with the help of such drugs.
Shares in Smith+ Nephew were up 3.7% at 0901 GMT.
The company said it expected profit headwinds from its sports medicine division due to a weaker China market.
“Overall, the Chinese healthcare system experienced a slowdown, both in capital sales, which are part of our sports medicine business, and in overall procedure volumes,” Nath added.
Healthcare firms that profit from treating obese and overweight patients are trying to convince investors that weight loss drugs won’t shrink their business.
Bernstein analysts said modest changes to the company’s 2023 guidance were likely to offset some of these concerns.
(This story has been corrected to change currency to dollars, not pounds, in paragraph 6)
(Reporting by Prerna Bedi in Bengaluru; Editing by Janane Venkatraman and Miral Fahmy)