- 2024 revenue up 7.7%, profit up 16.4%
- Mid-term guidance reiterated
- Dividend up 3%
Medical products company Convatec (CTEC) revealed strong organic revenue growth of 7.7% and a double-digit advance in adjusted earnings per share to 15.2 cents for 2024, ahead of consensus forecasts.
The results were well received with shares gaining more than 6% to 262.2p, topping the FTSE 100 leaderboard. Over the last 12-months the shares are up 5%, lagging the 14% gain in the blue-chip benchmark.
Revenue increased 7.7% in constant currencies to $2.28 billion, above the midpoint of the upgraded range given in November 2024, driven by growth across all four chronic care categories.
It marks the sixth consecutive year of accelerating organic revenue growth while adjusted operating margin increased by 1.6% to 21.8%, equating to a 3.5% improvement since 2021.
The Infusion Care division was the standout performer, delivering 11.2% organic revenue growth driven by strong demand for Convatec infusion sets in both diabetes and non-diabetes treatments.
WHAT DID THE COMPANY SAY?
Chief executive Karim Bitar commented: ‘Our FY24 results demonstrate that Convatec has successfully pivoted to broad-based, sustainable and profitable growth.
‘We expect FY25 to be another year of strong strategic progress. This will be driven by our strongest-ever innovative, new product pipeline and further simplification and productivity improvements.
‘We are on-track to deliver our medium-term guidance of 5% to 7% annual organic revenue growth, mid-20's operating margin by 2026 or 2027 and double-digit compound annual growth in adjusted EPS and free cash flow to equity.’
Free cash flow to equity is calculated by adjusting net cash generated from operations by capital expenditures, taxes, interest, and lease payments. It is a cash-based measure of return on equity.
Free cash flow to equity increased by 32.2% to $301.8 million for the year to December 2024.
Reflecting confidence in the outlook the board recommended a final dividend of 4.59 cents, taking the full year payout to 6.42 cents, up 3% on the prior year.
