6th Aug 2020 10:19
(Alliance News) - ConvaTec Group PLC said Thursday its profit increased for the first half of 2020, revenue grew steadily on stronger performance in the Continence & Critical Care and Infusion Care segments.
For the six months to the end of June, the FTSE 250 wound and skin care products firm reported a pretax profit of USD81.5 million, up 33% from USD61.3 million the year before, as revenue grew by 2.1% to USD908.0 million from USD888.9 million.
On a constant currency basis, revenue rose by 4.3%.
ConvaTec said that revenue growth was driven by robust results in certain segments, one of which was Continence & Critical Care, as revenue grew by 10% to USD244 million. Growth was driven by Covid-19-related demand for Critical and Hospital care products, as well as an increase in the US driven by the products GentleCath Glide.
The Infusion Care unit reported a 12% rise in revenue to USD161 million, driven by a strong performance in the insulin pump market, with strong orders from customers.
The group declared an interim dividend of 1.717 US cents per share, in line with the year before.
Looking ahead, ConvaTec said it expects several factors that drive a positive impact in the first half to reverse in the second half, but has maintained its annual guidance of 2.0% to 3.5% constant currency growth in revenue, and between 16% to 18% in the adjusted earnings before interest and taxes margin.
Although the group expects to still see good growth in Continence & Critical Care, it expects the higher Covid-19-related demand to reduce, and to have a negative impact from portfolio rationalisation in Ostomy Care.
"In the first half, despite the disruption caused by Covid-19, we delivered a solid trading performance and continued to implement our strategy to Pivot to Sustainable and Profitable Growth. Whilst there remains much work to do, we continue to push forward with key initiatives," said Chief Executive Officer Karim Bitar.
"In light of the current circumstances, we have accelerated some investments, in particular in our digital capabilities to respond to changes in customer engagement preferences, and our new operating model is embedding well. Conversely, other investments, such as salesforce expansions, have been deferred," Bitar added.
Shares in ConvaTec were up 1.6% at 206.00 pence on Thursday in London.
By Dayo Laniyan; [email protected]
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