Half year profits soar for medical products group ConvaTec

Convatec

ConvaTec Group, the Deeside company which specialises in medical products and technologies across the globe, saw profits double in its half year to June 30.

The group revealed revenues rose from £635m to £703.5m in the six month period, while pre-tax profits of £67.6m compared with £34.7m last year.

Today’s results showed it had made good progress on reducing its backorders which are now at a normal level.

The group also confirmed guidance for the full year, with expected organic revenue growth of 2.5%-3%, and an adjusted EBIT margin of 24%-25%.

Chief executive Paul Moraviec said: “In the first half of 2018, we delivered a solid performance and made good progress in many areas.

“Our Continence & Critical Care and Infusion Devices franchises delivered strong results and in the second quarter Ostomy Care returned to positive organic revenue growth.

“Within Advanced Wound Care we have seen strong demand for our newer Foam and Silver dressings, although this was offset by headwinds in our older DuoDERMTM hydrocolloid and base AQUACELTM dressings, as a result of the supply constraints of last year and challenging market dynamics.

“However, 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.”

He added: “The backorders which arose last year continued to fall during the second quarter and are now at a normal level, as planned.

“Despite the modest decline in adjusted gross margin in the first half, we are making good progress with our cost out programmes.

“We continue to invest in the commercial areas of the business and in new product development, whilst further reducing leverage.

“We are well positioned to deliver on our plans during the remainder of the year and consequently our guidance for the full year is unchanged.”

ConvaTec is a global medical products and technologies company focused on therapies for the management of chronic conditions, with leading market positions in advanced wound care, ostomy care, continence and critical care, and infusion devices.

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