Medical products group in good health after doubling annual profits
Convatec Group, the Deeside-based medical products business, more than doubled its profits in the year to December 31, 2023, it revealed today.
It said there was good organic growth across all four of its chronic care categories.
Revenues were $2.142bn, up from $2.072bn the previous year, while pre-tax profits jumped from $81.9m to $167.4m. The dividend has been raised from 6.047c per share to 6.229c.
The group said it has a strong new product pipeline, further strengthening its competitive position.
It is growing InnovaMatrix and ConvaFoam in the US on the back of positive clinician feedback.
The group acquired an innovative anti-infective nitric oxide technology platform and is launching a new compact hydrophilic catheter, GentleCath Air for Women, in Europe.
On the back of today’s results, the group said it is confident in improving its earnings and cash generation going forward.
In 2024 it expects 5-7% organic revenue growth, an adjusted operating profit margin of at least 21% on a constant currency basis, and double-digit growth in EPS and free cash flow to equity.
In the medium term, based on the strength of the new product pipeline and improvements in commercial execution, the group has raised its organic revenue growth expectation to 5-7% pa (previously 4-6%). It also expects to reach a mid 20’s% adjusted operating profit margin by 2026 or 2027 and to deliver double digit compound annual growth in EPS and free cash flow to equity.
Chief executive, Karim Bitar, said: “Convatec’s revenue growth accelerated and was broad-based across all our categories.
“We further expanded our operating margin and increased earnings per share and free cash flow to equity.
“We remain focused on executing our FISBE 2.0 strategy. Given our innovative new product pipeline and strengthened competitive position, Convatec has pivoted to a higher level of organic sales growth.”
He added: “We are on track to deliver our medium term margin guidance leading to double digit compound growth in EPS and free cash flow to equity.”
