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ConvaTec revenue up despite fall in sales during pandemic

ConvaTec full-year dividend up to 5.7 cents per share

ConvaTec (LON:CTEC), the medical technology company, confirmed a rise in full-year revenue along with a fall in earnings during 2020.

For the year ending in December 2020, ConvaTec’s revenue increased by 4% to $1.89bn, while pre-tax earnings fell by 1.1% to $350m.

According to a statement by the FTSE 100 company, ConvaTec’s performance during 2020 was driven by strong growth in the Infusion Care and Continence & Critical Care businesses, offsetting limited growth in Ostomy Care and a decline in Advanced Wound Care.

ConvaTec announced a dividend of 3.983 cents per share to take the full-year dividend for 2020 up to 5.7 cents. This was in line with the previous year’s figure.

ConvaTec is forecasting organic revenue growth of between 3-4.5% during 2021 and a constant currency adjusted EBIT margin of 18-19.5%.

The company’s share price rose by 2.33% to 193.2p in early morning trading upon the release of its financial results.

Karim Bitar, chief executive at ConvaTec, commented on the results:

“I am pleased with our strategic progress and how the business performed in 2020.  Against the backdrop of COVID-19 we set our new strategic direction of travel, responded well to the needs of our customers and improved our operational performance.  In addition our ongoing strategic transformation remains firmly on track.”

“The outlook for 2021 is positive although uncertainty surrounding COVID-19 persists.  We expect to see 2021 organic4revenue growth of between 3-4.5% and a constant currency adjusted EBIT margin of 18-19.5% as we continue to invest in our transformation, some of which was deferred from 2020, and as COVID-suppressed costs begin to normalise.”

“There is still further work ahead for the Group as we continue to strengthen our foundations and begin to pivot to sustainable and profitable growth, but I am confident in the inherent attractiveness of the markets we serve and in ConvaTec’s growth prospects.”

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