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Feb. 20, 2020, 2:33 a.m. EST

Smith & Nephew says outlook hinges on coronavirus

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By Adria Calatayud

Smith & Nephew PLC said Thursday that pretax profit for last year fell 4.9% as restructuring and acquisition costs offset faster revenue growth, and said it is monitoring the Covid-19 epidemic closely.

The FTSE 100-listed medical-technology company made a pretax profit of $743 million compared with $781 million a year before, it said. Net profit fell to $600 million from $663 million, the company said.

Revenue increased 4.8% to $5.14 billion, Smith & Nephew said. On an underlying basis, revenue was up 4.4%, near the top end of the company's guidance of growth of between 3.5% and 4.5% and accelerating from a 2% growth rate in 2018.

Revenue for the fourth quarter rose 8.7% to $1.41 billion, or 5.6% on an underlying basis, Smith & Nephew said.

Trading profit margin was 22.8%, in line with guidance, the company said.

Smith & Nephew said it expects underlying revenue growth for 2020 to be in a range of 3.5% to 4.5%, and trading profit margin to be at or slightly above that achieved in 2019. This outlook assumes the situation regarding the novel coronavirus epidemic normalizes early in the second quarter, the company said. In 2019, China represented 7% of the group's revenue, it said.

The board raised its annual dividend by 4% to 37.5 cents a share.

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