ConvaTec confident of its ‘significant’ future growth prospects
Medical products business ConvaTec has reported a “good financial performance” for the year to December 31, 2021, despite pre-tax profits slipping.
The Deeside-based group is 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 care.
In its latest financial year it reported sales of $2.038bn, up from $1.894bn, although pre-tax profits of $151.3m compared with $174.7m in 2020. The dividend per share increased from 5.7 cents per share to 5.8 cents.
However, the group hailed strong revenue growth and a broadly stable constant currency margin, resulting in attractive earnings per share growth and underpinning an inaugural dividend increase.
The group said it also made continued progress executing its FISBE – Focus, Innovate, Simplify, Build, Execute – strategy.
It made additional progress since the financial year end with an agreement to enter the attractive Wound Biologics segment with the proposed acquisition of Triad Life Sciences, expected to complete this month.
Drilling down, the group said its revenues improvement was driven by strong growth in Advanced Wound Care and Infusion Care and modest growth in Ostomy Care and CCC.
Total revenue growth was also supported by the Cure Medical and Patient Care Medical acquisitions, partially offset by the impact of non-core skin care and incontinence disposals.
ConvaTec explained the lower profit level was mainly due to continued investment, foreign exchange and inflationary headwinds.
Looking ahead to the current financial year, the group said it expects to achieve sustained organic revenue growth of between 4.0-5.5%. Notwithstanding the inflationary backdrop it currently expects its constant currency adjusted EBIT margin to increase to at least 18% compared with 17.7% in 2021.
Chief executive, Karim Bitar, said: “ConvaTec’s competitive position and financial performance continues to strengthen as we successfully execute our FISBE strategy.
“Our performance in 2021 demonstrates we are now pivoting to sustainable and profitable growth – with good revenue and earnings momentum.
“During 2021 we made significant operational improvements and grew our portfolio through strategic M&A – enabling us to deliver more effectively for our customers. I want to thank all my ConvaTec colleagues for their efforts over the past 12 months enabling us to deliver, at pace, our key initiatives, despite the constantly changing backdrop.
“The board is confident in the future prospects of the group and is proposing an increase in the full year dividend of three per cent.”
He added: “ConvaTec expects to grow revenue in line or faster than the markets in which we operate, which are growing at approximately four per cent. There is still work ahead, however, I am confident in ConvaTec’s significant growth prospects.”
