ConvaTec Group PLC on Wednesday increased its full-year guidance on the back of a boost in profit and a revenue rise in the first half.
The Reading, England-based medical products and technology company said pretax profit in the six months ended June 30 surged by 65% to $76.0 million, from $46.1 million the year prior.
Revenue was up 1.1% to $1.06 billion, from $1.04 billion. This was boosted by the 10% rise in Advanced Wound Care revenue to $338 million, from $307 million in the previous year.
Chief Executive Officer Karim Bitar said: ‘This performance demonstrates the momentum ConvaTec is building, revenue growth is accelerating and we are expanding our operating margin, despite ongoing investments to drive future growth and the challenging inflationary back drop. Given the strength of performance and the encouraging outlook, particularly in Advanced Wound Care, we are increasing our guidance for the full year.’
Selling & distribution expenses increased 6.1% to $304.7 million from $287.3 million year-on-year, which ConvaTec said was driven by higher headcount, and adjusted research & development costs of $4.4 million.
ConvaTec declared an interim dividend of 1.769 US cents, up 3.0% from 1.717 cents the year before, which reflects ‘continued confidence in the future performance’ of the company.
The company increased its full-year guidance, stating it now expected organic revenue growth of between 6.0% to 7.5%, based on the ‘broad-based growth’ across all categories, especially in Advanced Wound Care.
ConvaTec expects its 2023 operating margin to expand to at least 20.5% on a constant currency basis, and adjusted net finance expense for its full year to be towards the upper end of $70 to $80 million previously provided.
‘We have now pivoted to sustainable revenue growth and are focussed on driving margin expansion. We are increasingly confident of delivering sustainable future growth and an operating margin in the mid-20s,’ said ConvaTec.
Shares in ConvaTec were up 4.1% at 214.20 pence in London on Wednesday morning.
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