ConvaTec Group PLC (LON: CTEC) have reported solid results and growth reports in their third quarter trading statement released on Wednesday morning.
The achievements and targets were met and stay consistent with management expectations, allowing them to keep their 2019 guidance unchanged.
Following this update, UBS have reinstated ConvaTec’s rating to neutral whilst other firms such have Credit Suisse have informed investors about the trading update.
After a difficult few months of trading, it seems that the wounded reputation of ConvaTec is on the mend.
The medical products and technology firm reported that in the three months ending September 30, total revenue was $462.9 million, 2.4% higher than the $452.2 million reported a year before.
The company reported that the improvement was driven by 4.6% growth in organic revenue.
The growth consolidates ConvaTec’s status in the against other medical supplier firms such as RA Pharmaceuticals (NASDAQ: RARX) and UBS (EBR: UCB) who are set to complete a merger in early 2020.
Group performance was boosted by growth in all of the company’s units – Advanced Wound Care, Ostomy Care, Continence & Critical Care, and Infusion Devices.
“A number of markets in EMEA and Latin America performed well, while we continued to focus on leveraging our specialised and expanded salesforce in the US. There were some distributor inventory movements in the current and prior year which provided a tailwind in the quarter, which we anticipate will partly reverse in the fourth quarter,” ConvaTec explained.
The FTSE250 (INDEXFTSE: MCX) listed medical firm is currently undergoing structural transformation. The first half costs of these changes are estimated to cost $14 million with an anticipated full-year spend of $40 million.
In the nine month period, revenue was $1.35 billion, showing drop of 1.6% – blamed on foreign exchange movements – but growth of 1.5% on an organic basis, CovaTec said.
“The Transformation Initiative remains on track as we continue to implement the improvement projects and we will provide an update on progress with the 2019 results,” the company added
“I am pleased we have reported a solid performance in the third quarter, but this is a small step on the significant journey ahead of us as we focus on pivoting to sustainable and profitable growth. As an organisation we need to get closer to patients, to strengthen our innovation pipeline and to drive a relentless focus on execution excellence,” said Chief Executive Karim Bitar.
In 2018, ConvaTec reported pretax profit of $201.2 million on revenue of $1.83 billion.
Currently, shares of ConvaTec are trading at 198.5p per share, climbing 8.44%. 30/10/19 10:34BST.