Warning and CEO departure sees ConvaTec shares slump
Shares in Deeside-based ConvaTec Group fell by more than 26% this morning after revising down its growth and earnings expectations.
The international medical products and technologies company also announced that chief executive Paul Moraviec is to retire with immediate effect.
By 9.45am this morning shares in the group had slipped by 26.32% to 165.20p per share.
The group says it expects full year organic revenue growth to be flat, to 1%, from 2.5%-3.0%1 previously, while guidance for its adjusted EBIT margin has also been revised down to 23-24%, from 24-25%.
This is largely due to a change in inventory policy by its biggest customer in the infusion devices franchise, which is expected to have a material negative impact on revenue in the fourth quarter of between $18-$23m (£13.72-£15.53m), and, “to a lesser extent, challenging market dynamics in specific markets in advanced wound care”.
Also, this morning, chief executive Paul Moraviec informed the board that he wishes to retire.
A statement said he will cease to be a director with immediate effect.
The board has asked Rick Anderson, currently a non-executive director of ConvaTec and a former group chairman of Johnson & Johnson, to assume the position of interim chief executive with immediate effect, until a suitable candidate is appointed to replace Mr Moraviec.
ConvaTec said Mr Moraviec will continue to be available to the company to ensure an orderly transition.
Sir Christopher Gent, ConvaTec chairman, said: “I would like to thank Paul for leading ConvaTec through an important phase of the company’s development and the first period of being a public company.”
Mr Moraviec said: “We have made significant progress during my time as chief executive officer and I am confident that ConvaTec now has the strong platform, infrastructure and leadership to enable the business to flourish.”
In August the company issued a buoyant half year report which revealed a rise in revenues from £635m to £703.5m in the six month period to June 30, while pre-tax profits of £67.6m compared with £34.7m last year.
Mr Moraviec said at the time: “Recent positive trends and early results from our growth initiatives give us confidence that we will see an improved performance in advanced wound care in the second half.”
