UPDATE 1-Smith & Nephew unveils $300 mln share buyback
* $300 mln buyback planned alongside continued investment, M&A
* S&N buying small Indian business Sushrut-Adler
* Q1 revenues $1.075 bln vs consensus $1.07 bln
* Q1 adjusted EPS 18.5 cents vs consensus 18 cents
LONDON, May 2 (Reuters) - Medical devices maker Smith & Nephew is to hand back cash to shareholders through a $300 million share repurchase programme.
The supplier of artificial hips and knees announced the buyback on Thursday as part of a new capital allocation that will also see a commitment to continuing investment and acquisitions.
Industry analysts had been eagerly anticipating news on the company's plans for the use of its cash, although they were uncertain whether it would opt for a share repurchase scheme.
Chief Executive Olivier Bohuon said there was scope to return surplus capital despite ongoing investment. "We will continue to invest in our growth products, franchises and geographies and maintain adequate headroom for further significant acquisitions," he said.
The company said it was making a small acquisition in India by buying Adler Mediequip and with it the brands and assets of Sushrut Surgicals, a maker of orthopaedic trauma products for the Indian market, for an undisclosed sum.
The buyback news came as the group posted first-quarter revenue of $1.075 billion, against $1.079 billion a year ago, and adjusted earnings per share of 18.5 cents against 19.3.
Analysts, on average, had expected revenue of $1.07 billion and adjusted earnings per share of 18 cents, according to Thomson Reuters I/B/E/S.
The British company, which competes with Johnson & Johnson , Zimmer and Stryker in implants, said its outlook for 2013 was unchanged from the view which it set out with 2012 results in February.
However, the orthopaedic reconstruction business is seeing slightly lower growth than expected, relative to the market, while the recently acquired Healthpoint wound management unit is performing more strongly than previously indicated.
Investors have been anticipating a slowdown in orthopaedic reconstruction, pending the launch of new products towards the end of year.