S&N to take £50 million hit on lost sales; launches investigation

Source: Stock Market Digital

Date :02/05/2008 10:21:51

Smith & Nephew, the FTSE 100 medical group said Thursday that “unacceptable” sales practices in a business it bought last year will cost it more than $100 million (£50 million) in lost sales this year.

Europe’s largest medical devices company paid $889 million (£450 million) for Plus Orthopedics, a Swiss orthopedics company, in 2007.

As well as the $100 million impact on sales, Smith & Nephew, which makes artificial hips and knees as well as instruments for keyhole surgery, said that profits would fall by about $25 million this year.

Sales practices

Smith & Nephew has said it has begun an investigation into the sales practices, which emerged while Plus was being integrated into the company.

David Illingworth, chief executive at Smith & Nephew, said: “As soon as these actions came to light we took prompt decisive action and began an independent review of the situation which has progressed a long way but is not yet 100 percent complete.”

Shares in Smith & Nephew fell 13 percent on Thursday after it made its probe public.

May 02, 2008