Continued Strong Growth for Smith & Nephew.Business Editors & Health/Medical Writers LONDON--(BW HealthWire)--Aug. 1, 2002 Smith & Nephew NEPHEW, dom. rel. The son of a person's brother or sister. Amb. 514; 1 Jacob's Ch. R. 207. plc (NYSE NYSE See: New York Stock Exchange : SNN SNN Samenwerkingsverband Noord-Nederland SNN Sanane Inc. SNN Schoolnet News Network (Canada) SNN Shannon, Ireland - Shannon (Airport Code) SNN Special Needs Network SNN Sarimanok News Network ), the global medical devices company, today announces its interim results for the half year ended June June: see month. 29, 2002. Key points: - Underlying sales up 14% - Acquisitions added another 4% to sales - Profit before tax and exceptional items up 13% - EPS before exceptional items up 11%, underlying EPS up 18% - Further progress expected in second half Dudley Dudley, city (1991 pop. 186,513) and metropolitan district, W central England. Dudley's famed iron, coal, and limestone industries began declining c.1870. Other industries include engineering works, steelworks, metallurgy, glass cutting, textiles, and leatherworking. Eustace Eustace may refer to the following : People:
A presentation for analysts will be held at the City Presentation Centre, 4 Chiswell Street, Finsbury Coordinates: Finsbury is a place in the south of the London Borough of Islington. The name is first recorded as Vinisbir (1231) and means "manor of a man called Finn. Square, London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. EC1Y 4UP at 9:30 am (UK) today. A tele-conference call for analysts will be held at 10 am (Eastern) / 3 pm (UK) today and will be webcast on www.smith-nephew.com/interimreport. Please call Jeff Caravella at Taylor Taylor, city (1990 pop. 70,811), Wayne co., SE Mich., a suburb of Detroit adjacent to Dearborn; founded 1847 as a township, inc. as a city 1968. A small rural village until World War II, it developed significantly in the second half of the 20th cent. Rafferty Rafferty or Rafferty's rules Noun, pl Austral & NZ slang no rules at all [origin unknown] on (212)889-4350 for details. The morning meeting will be webcast and an archive version available on www.smith-nephew.com/interimreport. High-resolution high-res·o·lu·tion adj. 1. Relating to an image that has fine detail. 2. a. Of or relating to an output device that produces images that contain a large number of dots per unit of area and are therefore sharp and photographs are available to the media free of charge at www.newscast newscast Radio or television broadcast of news events. News gathering and broadcasting by the radio networks began in the mid-1930s and increased significantly during World War II. The television newscast began in 1948 with 15-minute programs that resembled movie newsreels. .co.uk Trading Results and Overview Our markets throughout the world continued to be strong in the first half of 2002 and Smith & Nephew sustained its pace of growth. Demand for our products in orthopaedics, endoscopy endoscopy Examination of the body's interior through an instrument inserted into a natural opening or an incision, usually as an outpatient procedure. Endoscopes include the upper gastrointestinal endoscope (for the esophagus, stomach, and duodenum), the colonoscope (for the and advanced wound management continues to be strong. For the third year running our orthopaedics business was the fastest growing implant implant /im·plant/ (im-plant´) to insert or to graft (tissue, or inert or radioactive material) into intact tissues or a body cavity. company. Sales in our ongoing businesses again performed strongly, rising 17%. Within this, underlying growth was 14%, aided by our program of new product launches and investment in sales forces. Sales price increases accounted for 1 1/2% of underlying growth. Adverse currency translation reduced overall sales growth by 1%. We are also selectively making acquisitions to augment aug·ment v. aug·ment·ed, aug·ment·ing, aug·ments v.tr. 1. To make (something already developed or well under way) greater, as in size, extent, or quantity: our business base, and these accounted for 4% of reported sales growth in the first half. As part of this acquisition program, we purchased ORATEC Interventions, Inc., in March, in order to gain a strong base in radio frequency technology for minimally invasive surgery minimally invasive surgery Laparoscopic surgery, see there. See Laparoscopic cholecystectomy. . In March, we completed our restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). programme with the disposal of Rehabilitation rehabilitation: see physical therapy. to AbilityOne for (pound)71m paid in cash, plus a 21 1/2% retained interest Retained interest (also colloquially known as a payout penalty) is future, currently unpaid, interest that some lenders add to the remaining principal of a loan to determine a payout figure in the event that the loan is terminated before the completion of the original term. in the enlarged company so as to benefit from the substantial value we believe will be created by combining the two businesses. Ongoing margins of 16 1/2% are after absorbing 1% of dis-synergies from last year's divestments and Rehabilitation this year and from incorporating goodwill amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. on the ORATEC acquisition. Profit before tax and exceptional items amounted to (pound)94m, an increase of 13%. This comprises (pound)87m of operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. from ongoing operations, (pound)2m of profit from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. (principally Rehabilitation), an (pound)11m share of the profits of BSN BSN abbr. Bachelor of Science in Nursing Medical and AbilityOne, less (pound)6m of interest cost. Amortization of acquisition goodwill charged to operating profit was (pound)8m, of which (pound)2m related to ORATEC. Earnings per share, exceptional items and cash flow The effective ordinary tax charge was 32%, resulting in earnings per share before exceptional items of 6.89p, an 11% increase. Adjusting for the dilutive effects Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of the disposals this and last year, the formation of the BSN Medical joint venture and from incorporating goodwill amortization on the acquisition of ORATEC, the underlying increase in earnings per share before exceptional items was 18%. Exceptional items comprise profit on disposals of (pound)19m, principally Rehabilitation, less (pound)9m of rationalization rationalization, in psychology: see defense mechanism. and acquisition integration costs and an (pound)8m write down in the value of our equity investment in Advanced Tissue Sciences, Inc. Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. was (pound)38m after (pound)9m of outgoings outgoings Noun, pl expenses outgoings plural noun expenses, costs, payments, expenditure, overheads, outlay outgoings npl ( on rationalization and acquisition integration. The net cost of acquisitions, principally ORATEC, was (pound)194m and the proceeds from disposing of Rehabilitation were (pound)71m. Net debt closed at (pound)350m after benefiting from (pound)28m of currency translation. Dividend An interim dividend of 1.80 pence pence n. Chiefly British A plural of penny. pence Noun a plural of penny USAGE: Since the decimalization of British currency and the introduction of the abbreviation p, per share (2001: 1.75 pence) will be paid on November November: see month. 15, 2002 to shareholders on the register at the close of business on October October: see month. 18, 2002. Shareholders may participate in the company's dividend reinvestment plan Dividend Reinvestment Plan (DRP) Plan which provides for automatic reinvestment of shareholder dividends in more shares of a company's stock, often without commissions. Some plans provide for the purchase of additional shares at a discount to market price. . Operating Review Orthopaedics Demand for hip and knee replacements and for trauma products shows no sign of diminishing di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. . Our orthopaedics business achieved increased underlying growth of 20%, maintaining its position as the fastest growing manufacturer of orthopedic orthopedic /or·tho·pe·dic/ (-pe´dik) pertaining to the correction of deformities of the musculoskeletal system; pertaining to orthopedics. implants. Hip and knee implants grew at 27% and trauma sales grew 8%. New products Oxinium Oxinium is the brand name of a material used for replacement joints manufactured by the reconstructive orthopedic surgery division of medical devices company Smith & Nephew. and Supartz contributed 10% to implant sales growth, and took knees to a notable 37% growth. Hip sales grew at 16%. Additional Oxinium knee components were launched in both the Genesis and Profix ranges. We continued to invest in computer aided surgery, where we achieved a 510k approval from the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. for knee procedures and extended our agreement for the development of software and instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. with Medtronic Medtronic Cardiology A major manufacturer of pacemakers, defibrillators, and other cardiac devices . The forthcoming retirement of Larry Papasan as President of the Orthopaedics division and the appointment on May 1 of David Illingworth as his successor were announced. Endoscopy The requirement for minimally invasive surgery for injuries, mainly caused by sport, remains strong. Endoscopy achieved an underlying sales growth of 10% in the first half, with the acquisition of ORATEC at the end of March contributing an additional 6% to this. Arthroscopic repair performed strongly and Trivex, our technique for varicose vein varicose vein, superficial vessel that is abnormally lengthened, twisted, or dilated, seen most often on the legs and thighs. Varicose veins develop spontaneously, and are usually attributed to a hereditary weakness of the vein; the valves in the vein that keep the removal, also made a useful impact. Integration of ORATEC is proceeding to plan, with cost savings on target. We have already launched a bipolar (1) See bipolar transmission. (2) One of two major categories of transistor; the other is "field effect transistor" (FET). Although the first transistors and first silicon chips were bipolar, most chips today are field effect transistors wired as CMOS logic, which radio-frequency resection resection /re·sec·tion/ (-sek´shun) excision. root resection apicoectomy. transurethral resection of the prostate (TURP), transurethral prostatic resection system to complement ORATEC's monopolar monopolar having a single pole. tissue shrinkage Shrinkage The amount by which inventory on hand is shorter than the amount of inventory recorded. Notes: The missing inventory could be due to theft, damage, or book keeping errors. products. We continue to improve the percentage of new products to sales in Endoscopy and to date this year have achieved 15%. The addition of the new radio-frequency products from ORATEC and our FasT-Fix and TwinFix suturing su·ture n. 1. a. The process of joining two surfaces or edges together along a line by or as if by sewing. b. The material, such as thread, gut, or wire, that is used in this procedure. c. devices will accelerate this still further. Both the new headquarters in Andover, Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. , and our
extended Mansfield, Massachusetts Mansfield is a town in Bristol County, Massachusetts, United States. As of the United States 2000 Census, the town population was 22,414.For geographic and demographic information on the village of Mansfield Center, please see the article Mansfield Center, Massachusetts. , manufacturing facility are now fully operational. Advanced wound management The growing population of elderly people underpins the strong demand for our advanced wound healing wound healing Physiology The repair of a wound Steps Inflammation, repair and closure, remodeling, final healing; repair of incisions may be either simple–'clean' wounds with little loss of tissue heal by 'primary intention', or 'dirty' wounds heal by products, a market we continue to lead. Sales in advanced wound management grew at an underlying 11%, with a further 8% arising at the half year from the acquisitions of Beiersdorf's advanced wound management business and Acticoat Acticoat™ Wound care A silver nitrate-based antibacterial burn dressing for wound protection. See Pressure ulcer. last year. Our lead product Allevyn again demonstrated strong sales growth of 23% and we continue to develop this range to meet new needs. Our burns products continue to do well and the global rollout of Acticoat, the silver-based dressing, is being met with enthusiasm by wound management specialists and nurses. Dermagraft, our bio-engineered dermis dermis: see skin. for patients with hard to heal diabetic foot diabetic foot A foot with a constellation of pathologic changes affecting the lower extremity in diabetics, often leading to amputation and/or death due to complications; the common initial lesion leading to amputation is a nonhealing skin ulcer, induced by ulcers Ulcers (Digestive) Definition In general, an ulcer is any eroded area of skin or a mucous membrane, marked by tissue disintegration. In common usage, however, ulcer usually is used to refer to disorders in the upper digestive tract. , received initial reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. approval in the US in April. Sales and extension of reimbursement coverage across the US are meeting their respective targets. BSN Medical joint venture At BSN, trading and integration rationalization remains on target, with a consequential con·se·quen·tial adj. 1. Following as an effect, result, or conclusion; consequent. 2. Having important consequences; significant: improvement in profitability to a 12% margin. Outlook We are pleased with the progress of the Group and particularly with the strong growth and increased market share in orthopaedics. Our investment in new products and strengthened sales force is paying off. Our underlying margins continue to improve and we expect this to continue in the second half of the year. The medical devices sector continues to demonstrate strong growth characteristics and we expect to make further progress in the second half of the year and beyond. Smith & Nephew is a global advanced medical devices company with a highly successful track record in developing, manufacturing and marketing a wide variety of innovative and technologically advanced tissue repair products. These products are primarily in the areas of bone, joints, skin and other soft tissue. Smith & Nephew has extensive marketing and distribution capabilities, with established sales in more than 90 countries. Smith & Nephew ADRs, each equivalent to ten ordinary shares, trade on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol SNN. Smith & Nephew ordinary shares trade on the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. . Shares are quoted on the SEAQ SEAQ See: Stock Exchange Automated Quotation System System, and prices may be accessed on the Reuter Equities 2000 Service under the symbol SMN SMN Survival Motor Neuron SMN Servicio Meteorologico Nacional (Spanish: National Meteorological Service) SMN Santa Maria Novella (church and main train station, Florence, Italy) SMN Summoner .L, on Bloomberg Bloomberg A major global provider of 24-hour financial news and information including real-time and historic price data, financials data, trading news and analyst coverage, as well as general news and sports. under the symbol SNN, and on Quotron under the symbol SMU SMU Southern Methodist University SMU Solid (Waste) Management Unit SMU Saint Mary's University (Halifax, Nova Scotia; Philippines) SMU Singapore Management University SMU Saint Mary's University of Minnesota .EU. For further information, visit Smith & Nephew's website at http://www.smith-nephew.com.
SMITH & NEPHEW plc
2002 INTERIM RESULTS continued
Unaudited Group Profit and Loss Account
for the Half Year Ended June 29, 2002
Year 2001
2001 2002 Restated#
(pound)m Notes (pound)m (pound)m
Turnover 1,2
943.0 Ongoing operations 531.9 454.1
35.3 Operations contributed
---- to the joint venture - 35.3
-------- ------
978.3 Continuing operations 531.9 489.4
103.4 Discontinued operations 3 26.2 58.4
----- ------ ------
1,081.7 Group turnover 558.1 547.8
123.6 Share of joint venture 79.3 41.9
----- ---- ----
1,205.3 637.4 589.7
======= ===== =====
Operating profit
Ongoing operations
160.4 - before exceptional
items 87.1 77.7
(19.3) - exceptional items* 5 (15.3) (14.0)
----- ------ -----
141.1 71.8 63.7
Operations contributed to
the joint venture
3.6 - before exceptional
items 2 - 3.6
(1.8) - exceptional items* 5 - -
----- ------ ------
142.9 Continuing operations 71.8 67.3
11.1 Discontinued operations 3 2.1 6.9
----- ----- ------
154.0 73.9 74.2
Share of operating profit
of the joint venture
12.8 - before exceptional
items 2 9.4 4.0
(5.0) - exceptional items* 6 (1.3) (2.5)
----- ----- -----
161.8 82.0 75.7
- Share of operating profit
of the associated
undertaking 3 1.4 -
------ ------ ------
161.8 83.4 75.7
49.2 Discontinued operations
- net profit on
disposals* 3 19.0 47.1
----- ------ ------
211.0 Profit on ordinary activities
before interest 102.4 122.8
(17.4) Interest 7 (6.3) (9.5)
----- ------ ------
193.6 Profit on ordinary activities
before taxation 96.1 113.3
64.0 Taxation 8 45.5 41.2
----- ----- -----
129.6 Attributable profit 50.6 72.1
42.9 Ordinary dividends 9 16.7 16.1
----- ----- -----
86.7 Retained profit 33.9 56.0
===== ===== =====
14.07p Basic earnings per 10 5.46p 7.84p
ordinary share
13.95p Diluted earnings per
ordinary share 10 5.42p 7.76p
Results before
exceptional items (*)
(pound)170.5m Profit before taxation 11 (pound)93.7m (pound)82.7m
12.83p Adjusted basic earnings
per ordinary share 10 6.89p 6.20p
12.72p Adjusted diluted earnings
per ordinary share 10 6.84p 6.14p
# See note 13
SMITH & NEPHEW plc
2002 INTERIM RESULTS continued
Abridged Group Balance Sheet as at June 29, 2002
Year 2001
2001 2002 Restated#
(pound)m Notes (pound)m (pound)m
Fixed assets
187.8 Intangible assets 332.8 186.5
245.0 Tangible assets 248.9 233.5
114.0 Investment in joint
venture(A) 2 112.4 135.3
- Investment in associated
undertaking(B) 3 7.5 -
25.7 Investments 17.7 26.1
----- ----- -----
572.5 719.3 581.4
----- ----- -----
Working capital
232.2 Stocks 241.6 224.5
263.2 Debtors 280.4 277.3
(21.7) Creditors - acquisition
consideration (18.2) (23.1)
(302.8) - other (303.1) (290.5)
----- ----- -----
170.9 200.7 188.2
(55.4) Provisions - deferred taxation (54.8) (55.6)
(39.9) - other (37.2) (47.3)
----- ----- -----
648.1 828.0 666.7
===== ===== =====
404.6 Share capital and reserves 477.9 369.1
243.5 Net borrowings 350.1 297.6
----- ----- -----
648.1 828.0 666.7
===== ===== =====
(A) Investment in joint venture comprises goodwill (pound)71.3 million
and share of gross assets of (pound)107.8 million less share of
gross liabilities (pound)66.7 million.
(B) Investment in associated undertaking comprises goodwill
(pound)15.9 million and share of gross assets of (pound)12.5
million less share of gross liabilities (pound)20.9 million.
Abridged Movement in Shareholders' Funds
for the Half Year Ended June 29, 2002
Year 2001
2001 2002 Restated#
(pound)m (pound)m (pound)m
268.0 Opening shareholders' funds as
previously reported 404.6 329.6
- Adjustments on adoption of FRS 19 - (61.6)
------ ------- -----
268.0 Opening shareholders funds - restated 404.6 268.0
129.6 Attributable profit 50.6 72.1
(42.9) Dividends (16.7) (16.1)
(8.8) Exchange adjustments 6.0 (8.5)
17.9 Goodwill on disposals/operations
contributed to the joint venture 30.0 17.9
31.8 Unrealized gain on formation of
the joint venture - 31.8
(2.1) Movements relating to the QUEST (0.4) -
11.1 Issue of shares 3.8 3.9
------ ------- -------
404.6 Closing shareholders' funds 477.9 369.1
====== ======= =======
# See note 13
SMITH & NEPHEW plc
2002 INTERIM RESULTS continued
Abridged Group Cash Flow for the Half Year Ended June 29, 2002
Year 2001
2001 2002 Restated#
(pound)m (pound)m (pound)m
154.0 Operating profit 73.9 74.2
60.3 Depreciation and amortization(C) 43.9 30.4
(22.4) Working capital and provisions (38.9) (42.1)
----- ---- ----
191.9 Net cash inflow from operating
activities(D) 78.9 62.5
(72.6) Capital expenditure and
----- financial investment (41.2) (31.0)
---- ----
119.3 Operating cash flow 37.7 31.5
- Joint venture dividend 2.2 -
(16.5) Interest (5.2) (9.3)
(76.2) Tax (29.7) (33.4)
(42.0) Dividends (26.8) (25.8)
(69.3) Acquisitions (193.5) (59.0)
61.7 Disposals 71.8 61.7
12.6 Joint venture formation 5.7 (4.2)
9.0 Issues of ordinary share
---- capital 3.4 3.9
------ -----
(1.4) Net cash outflow (134.4) (34.6)
(5.8) Exchange adjustments 27.8 (26.7)
(236.3) Opening net borrowings (243.5) (236.3)
------- ------ ------
(243.5) Closing net borrowings (350.1) (297.6)
======= ====== ======
(C) Includes goodwill amortisation of (pound)8.1 million ((pound)10.4
million for full year 2001 and (pound)4.5 million at the half
year) and (pound)8.0 million exceptional write down against the
group's equity investment in Advanced Tissue Sciences, Inc.
(D) After (pound)9.1 million ((pound)23.5 million for full year 2001
and (pound)12.2 million at the half year) of outgoings on
rationalisation, acquisition integration and divestment costs.
Statement of Total Recognized Gains and Losses
for the Half Year Ended June 29, 2002
Year 2001
2001 2002 Restated#
(pound)m (pound)m (pound)m
129.6 Attributable profit 50.6 72.1
31.8 Unrealized gain on formation
of the joint venture - 31.8
(8.8) Currency translation differences
on foreign currency net investments 6.0 (8.5)
------ ----- ----
152.6 Total recognized gains and losses 56.6 95.4
====== ===== ====
# See note 13
SMITH & NEPHEW plc
NOTES TO THE 2002 INTERIM RESULTS
1. Segmental performance for the half year ended June 29, 2002 was as
follows:
Group Turnover by product
Year
2001 2002 2001 Underlying
(pound)m (pound)m (pound)m sales
growth
404.6 Orthopaedics 235.8 199.4 20%
252.8 Endoscopy 141.7 123.2 10%
285.6 Advanced Wound Management 154.4 131.5 11%
------- ----- ----- ---
943.0 Ongoing operations 531.9 454.1 14%
===== ===== ===
35.3 Operations contributed to the
joint venture - 35.3
103.4 Discontinued operations 26.2 58.4
------- ---- ------
1,081.7 558.1 547.8
======= ======= =======
Group turnover by geographic market
Year
2001 2002 2001 Underlying
(pound)m (pound)m (pound)m sales
growth
268.4 Europe* 155.6 130.6 13%
534.9 America 303.1 257.6 14%
139.7 Africa, Asia and Australasia 73.2 65.9 15%
------ ------ ------ ---
943.0 Ongoing operations 531.9 454.1 14%
===
35.3 Operations contributed to the
joint venture - 35.3
103.4 Discontinued operations 26.2 58.4
------ ---- ------
1,081.7 558.1 547.8
======= ===== =====
* Includes United Kingdom sales of (pound)40.8 million ((pound)77.5
million for full year 2001 and (pound)37.0 million at the half
year).
Underlying sales growth is sales growth adjusted to eliminate the
effect of translational currency, acquisitions and disposals.
2. On April 1, 2001, the casting and bandaging and traditional
woundcare businesses were contributed to a joint venture with
Beiersdorf AG called BSN Medical in return for a 50% equity
interest. The results of these businesses prior to contribution
represent operations contributed to the joint venture in the group
profit and loss account.
3. On March 27, 2002, the rehabilitation business was disposed of to
AbilityOne for (pound)71.3 million cash and a 21.5% equity
interest in the combined business. AbilityOne is accounted for as
an associated undertaking under the net equity method. The results
of rehabilitation prior to disposal represent discontinued
operations. The net profit on disposal of (pound)17.2 million is
stated after deducting (pound)30.0 million of goodwill previously
written off to reserves on acquisition. The remaining gain of
(pound)1.8 million relates to adjustments in respect of previous
disposals. Discontinued operations in 2001 also include the
results and net profit on disposal of the ear, nose and throat
business.
4. On March 28, 2002, ORATEC Interventions, Inc., a company that
applies radio frequency energy to treat joint and spine disorders,
was acquired for a net consideration of(pound)190.6 million. The
fair value of assets acquired was(pound)26.9 million and goodwill
arising was(pound)163.7 million.
5. Operating exceptional items within ongoing operations comprise an
(pound)8.0 million write down against the group's equity
investment in Advanced Tissue Sciences, Inc., (pound)3.1 million
costs of rationalisation consequent on the contribution of
businesses to BSN Medical and manufacturing rationalisation (2001
half year (pound)8.7 million; full year (pound)10.4 million) and
(pound)4.2 million of acquisition integration costs (2001 half
year (pound)5.3 million; full year (pound)8.9 million). Operating
exceptional items within operations contributed to the joint
venture in 2001 represented manufacturing rationalisation costs.
6. The group's share of exceptional items of the joint venture
relates to manufacturing rationalisation costs of BSN Medical.
7. Interest includes (pound)0.8 million (2001 - (pound)0.2 million)
in respect of the group's share of the net interest charge of BSN
Medical and (pound)0.3 million (2001 - nil) in respect of the
group's share of the net interest charge of AbilityOne.
8. The tax charge is based on an estimated effective rate of 32% on
the full year's results before exceptional items and includes
(pound)15.6 million in respect of the net exceptional items. Of
the total, (pound)37.7 million relates to overseas taxation,
(pound)2.6 million relates to the group's share of the tax of BSN
Medical and (pound)0.3 million relates to the group's share of the
tax of AbilityOne.
9. An interim dividend of 1.80 pence per ordinary share (2001 - 1.75
pence per ordinary share) will be paid on November 15, 2002 to all
shareholders on the register at the close of business on October
18, 2002. Shareholders may participate in the dividend
reinvestment plan.
10. The basic average number of ordinary shares in issue was 926
million (2001 - 920 million). The diluted average number of
ordinary shares in issue was 933 million (2001 - 929 million).
11. Results before exceptional items state profit before taxation
before charging the cost of exceptional items and the net profit
on the disposal of discontinued operations. Adjusted earnings per
ordinary share is based on the attributable profit before
accounting for these items and associated taxationthereon.
12. The interim financial information has been prepared on the basis
of the accounting policies set out in the full annual accounts of
the group for the year ended December 31, 2001. The financial
information contained in this interim statement does not
constitute statutory accounts as defined in Section 240 of the
Companies Act 1985.
13. Half year 2001 comparative figures have been restated for the
adoption in the 2001 full year results of Financial Reporting
Standard 19 and Urgent Issues Task Force Abstract 31.
14. The financial information for the year ended December 31, 2001 has
been extracted from the full annual accounts of the group which
have been filed with the Registrar of Companies. The auditors'
report on those accounts was unqualified.
Independent Review Report to Smith & Nephew plc We have been instructed by the company to review the financial information for the six months ended June 29, 2002 which comprises the Group Profit and Loss Account, Abridged Group Balance Sheet, Abridged Group Cash Flow Statement, Statement of Total Recognized Gains Recognized Gain The amount of gain reported for income tax purposes. Notes: You can defer recognizing some gains until the following year(s). See also: Capital Gain, Capital Loss, Deferred Income Tax, Drought Sale, Exempt Income, Exemption, Gain, Recognized Loss and Losses, Abridged Movement in Shareholders' Funds and the related notes 1 to 14. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim report in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the Listing Rules of the Financial Services Authority The Financial Services Authority ("FSA") is an independent non-departmental public body and quasi-judicial body that regulates the financial services industry in the United Kingdom. Its main office is based in Canary Wharf, London, with another office in Edinburgh. which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. We conducted our review in accordance with guidance contained in Bulletin 1999/4 `Review of interim financial information' issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures Analytical Procedures is one of financial audit skill which help an auditor understand the client's business and changes in the business, to identify potential risk areas and to plan other audit procedures. to the financial information and underlying financial data, and based thereon there·on adv. 1. On or upon this, that, or it. 2. Archaic Following that immediately; thereupon. Adv. 1. thereon - on that; "text and commentary thereon" on it, on that , assessing whether the accounting policies and presentation have been consistently applied, unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended June 29, 2002. Ernst & Young LLP LLP - Lower Layer Protocol London |
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