Trading on track for Deeside wound care group
Deeside medical products group ConvaTec reported a solid third quarter of trading with results following management expectations.
In an update to the stock market this morning, the group said full year guidance remains unchanged on the back of its performance in the three months to September 30.
Group revenue was $462.9m, 2.4% higher on a reported basis and 4.6% higher on an organic basis compared with the prior year, in part reflecting the benefits of some short-term tailwinds.
For the nine months to September 30, revenue was $1.351.8bn, a decline of 1.6% on a reported basis due to foreign exchange movements, but growth of 1.5% on an organic basis, compared with the prior year.
ConvaTec is a global medical products and technologies company focused on therapies for the management of chronic conditions.
It is a market leader in advanced wound care, ostomy care, continence and critical care, and infusion devices.
The group revealed that in advanced wound care, orgranic growth of 3.6% was driven by its silver portfolio.
Organic growth of 3% in ostomy care reflected a solid underlying performance against a weak 2018 performance.
Continence and critical care produced organic growth of 8%, but was flattered, as expected, by a weaker prior year comparator due to a packaging recall, along with continued growth in the home distribution group.
Infusion devices showed organic growth of 4.3%, reflecting a weaker prior year comparator.
Chief executive Karim Bitar, who joined the group in September, said: “I am excited to have joined ConvaTec and returned to the healthcare sector.
“Since I joined the group at the end of September I have had the opportunity to visit several sites and engage with many colleagues; I have been encouraged by their enthusiasm and the potential within ConvaTec.
“I am pleased we have reported a solid performance in Q3, but this is a small step on the significant journey ahead of us as we focus on pivoting to sustainable and profitable growth.
“As an organisation we need to get closer to patients, to strengthen our innovation pipeline and to drive a relentless focus on execution excellence.”
He added: “I look forward to giving an update on our plans and progress next year.”
The group said its transformation initiative remains on track as it continues to implement the improvement projects and it will provide an update on progress with the full year results.
On October 24, the group successfully completed a refinancing of the debt put in place at the time of the IPO in October 2016.
The debt outstanding under this arrangement of approximately $1.6bn term debt and an undrawn $200m revolving credit facility, has been replaced with a committed five-year bank facility of a $1.5bn term debt and a $200m revolving credit facility, on more favourable terms overall.
Dr John McAdam was appointed as chairman of the board and assumed his position on September 30.
ConvaTec’s products provide a range of clinical and economic benefits including infection prevention, protection of at-risk skin, improved patient outcomes and reduced total cost of care.
The group has 8,500 staff and does business in more than 100 countries.
