ConvaTec 2020 profit rises with outlook for year ahead "positive"

(Alliance News) - ConvaTec Group PLC on Friday reported revenue edged up in 2020 and said its ...

Alliance News 5 March, 2021 | 8:43AM
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(Alliance News) - ConvaTec Group PLC on Friday reported revenue edged up in 2020 and said its outlook for the year ahead is "positive".

Shares in the medical products and technologies company were up 2.4% at 193.30 pence in London on Friday, the second best performer in the FTSE 250 in early trade.

Revenue for 2020 rose 3.7% to USD1.89 billion, up 4.0% on a constant currency basis. Adjusting for the disposal of the US Skincare product line and the acquisition of Southlake Medical, revenue grew 4.2% on an organic basis.

Pretax profit surged to USD174.7 million from just USD18.9 million in 2019. ConvaTec's profit was dragged down in 2019 by impairment charges of USD105.5 million.

Adjusted pretax profit for 2020 still rose, up 7.6% to USD297.4 million from USD276.3 million.

ConvaTec said its fourth-quarter performance was stronger than expected, driven by a further step-up in demand for critical care products amid a resurgence of coronavirus infections across the globe.

Continence & Critical Care revenue rose 9.2% in 2020 to USD498 million, while Infusion Care sales were up 17% at USD323 million. Ostomy Care revenue was broadly stable on the year before while Advanced Wound Care saw a 4.0% decline.

The company proposed a final dividend of 3.983 cents per share, bringing the full-year payout to 5.7 cents, in line with 2019.

"I am pleased with our strategic progress and how the business performed in 2020. Against the backdrop of Covid-19 we set our new strategic direction of travel, responded well to the needs of our customers and improved our operational performance. In addition our ongoing strategic transformation remains firmly on track," said Chief Executive Karim Bitar.

"The outlook for 2021 is positive although uncertainty surrounding Covid-19 persists," Bitar continued. "We expect to see 2021 organic revenue growth of between 3-4.5% and a constant currency adjusted EBIT margin of 18-19.5% as we continue to invest in our transformation, some of which was deferred from 2020, and as Covid-suppressed costs begin to normalise."

By Lucy Heming; lucyheming@alliancenews.com

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
ConvaTec Group PLC 282.60 GBX -0.35

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