13th Nov 2025 10:42
(Alliance News) - Convatec Group PLC on Thursday said it is on track to meet guidance for the full-year and the company expects "double-digit" profit growth in 2026.
Convatec shares rose 6.4% to 251.79 pence each in London, one of the best blue-chip performers. The wider FTSE 100 was down 0.4%.
The London-based medical products and technologies provider said organic revenue in the 10 months to October 31 has climbed 6.3%, when excluding the InnovaMatrix wound care offering. Including InnovaMatrix, revenue rose 6.2% on a report basis, and 5.0% organically.
InnovaMatrix is a skin substitute product which has been subject to US regulatory uncertainty. The Centers for Medicare & Medicaid Services published in October a revised payment rate of USD127.28 per square centimetre for skin substitutes in wound care, with effect from January 1, 2026.
Convatec said earlier this month the decision by the CMS represents an estimated headwind in 2026 of 1% to 2% of group revenue, unchanged from the guidance given at the time of first half results.
Convatec hailed "broad-based" organic growth over the 10 months.
"New product launches delivered strong sales growth, offsetting market headwinds and demonstrating the resilience of our business. We saw broad-based growth across our chronic care categories, together with further benefits of our ongoing simplification and productivity initiatives," Chief Executive Officer Jonny Mason said.
"We are well-positioned to deliver our financial targets again this year, and beyond."
For the whole of 2025, it expects organic revenue growth, excluding InnovaMatrix, of 6.0% to 6.5%. The guidance has been narrowed from the 5.5% to 7.0% range.
An adjusted operating profit margin of 22.0% to 22.5% is still expected, improving from 21.2% in 2024. This outlook includes a 30 basis point hit from "tariff headwinds".
Convatec still predicts double-digit growth in adjusted earnings per share.
For 2026, it sees "another year of double-digit adjusted EPS growth" and more adjusted operating profit margin progress, "irrespective of the regulatory outcome for InnovaMatrix".
"This will be driven by 5-7% organic growth in non-InnovaMatrix sales," Convatec said.
Former chief executive Karim Bitar died in October while on sick leave. Bitar had been on a medical leave of absence since August.
By Eric Cunha, Alliance News news editor
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