ConvaTec Group PLC on Wednesday said it has raised its medium-term growth guidance after a profitable year.
Shares in ConvaTec were trading 6.7% higher at 269.20 pence in London that morning.
The Reading, England-based medical products and technology company said its pretax profit more than doubled to $167.4 million in 2023, from $81.9 million the prior year.
Basic earnings per share likewise more than doubled to 6.4 US cents from 3.1 cents.
ConvaTec also said revenue increased 3.4% to $2.14 billion from $2.07 billion, while organic revenue growth accelerated to 7.2%, ‘broad-based across all four chronic care categories’.
The Advanced Wound Care division gave the strongest performance, with revenue increasing 12% or 9.5% organically to $695.3 million from $620.7 million. ConvaTec attributed this to its ‘strong performance in antimicrobials and growing position in [the] wound biologics segment’.
Infusion Care revenue meanwhile grew 8.7% on a reported and organic basis, to $370.9 million from $341.1 million, thanks to continued strong demand for infusion sets.
ConvaTec then said adjusted operating profit increased 7.0% to $431.8 million, with a margin of 20.2% or 20.8% on a constant currency basis. This was up from $403.7 million with a 19.5% margin in 2022.
ConvaTec has recommended a final dividend of 4.460 cents per share, up from 4.330 cents the previous year. This would bring the full-year total dividend up to 6.229 cents from 6.047 cents.
ConvaTec also said it further strengthened its competitive position throughout the year with a ‘strong new product pipeline’ and three acquisitions. These consisted of two small bolt-on acquisitions and its takeover of Starlight Science Ltd in April, which brought a ‘highly innovative anti-infective nitric oxide technology platform’ to complement the Advanced Wound Care portfolio.
For the current year, ConvaTec expects 5% to 7% organic revenue growth, with an adjusted operating profit margin of at least 21.0% at constant currency. It also expects double-digit growth in EPS.
ConvaTec also said it has raised its medium-term organic revenue growth guidance to 5% to 7%, with further double-digit compound annual EPS growth. It also expects a mid-20s% adjusted operating profit margin by 2026 or 2027.
The increased guidance is ‘based on the strength of the new product pipeline and improvements in commercial execution,’ ConvaTec explained.
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