Healing the wounds helps S&N to drive up growth

The group, Europe's biggest maker of replacement knees and hips, said sales increased to $941m (582m) in the three months to the start of October, while trading profits hit $215m (133m).

Its Advanced Wound Management division, which employs about 900 in Hull, delivered the strongest divisional performance, with sales up seven per cent to $230m (142m). That beat the estimated global market growth of about four per cent.

"I'm very pleased with the growth. All the geographies are performing very well," said Roger Teasdale, Advanced Wound Management (AWM) president. "I'm very pleased with the rate of innovation and Hull is playing a great part (in that)."

The division treats hard-to-heal wounds, such as serious burns and chronic ulcers, with the bulk of its innovation done in Hull. It added eight new products and line extensions during the quarter. AWM's European revenues were up five per cent, with strong sales in Germany and France. US revenues grew by eight per cent, with the rest of the world increasing sales by 12 per cent.

The division's trading margin increased by 280 basis points to 24.6 per cent thanks to efficiencies such as closing its Florida plant and opening in China, and consolidating sites in Hull. A year ago it closed a small office near its Hull headquarters, moving about 100 sales staff into the main site.

However, Mr Teasdale warned increasing pressure from cash-strapped European governments is likely to dampen margin growth in coming months, with France and Spain both cutting reimbursement or financial support for treatment.

"I certainly do not think we're going to see the level of improvement in our margin, which has been quite staggering," he said. "We see quite a lot of headwind in terms of market pressures and prices.

"We partner with a lot of intermediaries who are finding times hard and reducing inventory levels." AWM hailed a recent patent victory for its Negative Pressure Wound Therapy, which uses suction to heal wounds.

The company has fought a long-running legal battle with market leader Kinetic Concepts over the treatment, and last month a judge in Texas invalidated its rival's patents.

"It's certainly not over but the US decision is a significant decision for us," said Mr Teasdale. "The judgement is very specific and far-reaching and also it's the largest healthcare market in the world."

Negative pressure is a $1.6bn market, with the bulk of sales in the US. It is forecast to grow rapidly.