24th Feb 2026 08:40
(Alliance News) - Convatec Group PLC on Monday said it expects growth to "accelerate" as it raised medium-term revenue guidance alongside broadly in line 2025 earnings.
The London-based medical products and technologies provider said pretax profit fell 6.5% to USD230 million in 2025 from USD246 million in 2024, but rose 15% to USD471 million from USD411 million on an adjusted basis.
Operating profit declined 2.7% to USD316 million from USD325 million with an operating profit margin of 13.0%, down from 14.2%.
On an adjusted basis, operating profit grew 12% to USD544 million from USD485 million, a touch ahead of USD542 million company compiled consensus.
Adjusted operating profit margin of 22.3% in 2025, was up from 21.2% in 2024, in line with consensus.
Revenue increased 6.5% to USD2.44 billion in 2025 from USD2.29 billion the year prior, just ahead of company consensus of USD2.43 billion.
Sales grew 6.2% in AWC ex-InnovaMatrix, by 6.6% in Ostomy Care, by 7.1% in Continence Care and by 15% in Infusion Care.
Excluding wound care treatment InnovaMatrix, organic revenue growth was 6.4%, the fifth year of organic revenue growth within the firm's target 5% to 7% range.
"Convatec performed strongly in 2025, demonstrating further resilient growth. We delivered broad-based organic revenue growth across all categories, supported by new product launches, operating margin expansion, mid-teens growth in adjusted earnings per share and strong cash conversion," commented Chief Executive Jonny Mason.
Looking ahead, Convatec believes growth is "set to accelerate", driven by "successful implementation of our strategy, recent product launches and our rich product pipeline. Faster growth will also be supported by higher growth capex."
As a result, the firm increased its organic revenue growth target to a range of 6% to 8% from 2027 from 5% to 7% previously.
In response, shares in Convatec shot up 7.8% to 244.60 pence each in London on Tuesday morning. It was the best performing stock on the FTSE 100 which was down 0.3%.
The firm is projecting a "mid-20s%" adjusted operating margin by 2027, sustainable double-digit adjusted annual EPS growth and double-digit free cash flow to equity compound annual growth.
Convatec said it has identified further "compelling" organic investment opportunities to accelerate growth.
The company expects total capex in 2026 of USD200 million to USD230 million, including growth capex of USD135 million to USD165 million.
It expects operational capex to run at around 2.5% of revenue annually.
"Growth capex will flex to the opportunities available, consistent with our clear capital allocation framework," it added.
For 2026, Convatecx reiterated guidance for double-digit adjusted EPS growth and organic revenue growth, excluding InnovaMatrix, of 5% to 7%.
It forecast adjusted operating margin of at least 23.0%, including 20 basis points of incremental tariff costs.
The full-year dividend was increased 13% to 7.24 US cents from 6.42 cents in 2024.
By Jeremy Cutler, Alliance News reporter
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