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Highlights

  • In FY23, CTEC’s revenue surged by approximately 3.3% compared to FY22.
  • Operating profit saw a notable surge of around 27.1% in the same period.
  • The company reported a significant rise of 103.2% in diluted earnings per share (EPS) for FY23.
  • The company plans to achieve annual organic revenue growth of 5-7%, aiming to elevate the adjusted operating margin to mid-20s by 2026 or 2027.

ConvaTec Group PLC (LSE: CTEC) is a medical products and technologies company. It is listed on the FTSE 100 index. The company has a market capitalization of GBP 4956.39mn.

In FY23, the company's revenue experienced a modest increase of approximately 3.3% compared to FY22. This growth was tempered by the strategic decision to exit non-core hospital care activities and associated industrial sales in 2022.

Operating profit saw a notable surge of around 27.1% in the same period. This increase in profitability was driven by a favorable product mix, stronger pricing dynamics, and enhanced productivity efficiencies across operations. Additionally, the company reported a significant rise of 103.2% in diluted earnings per share (EPS) in FY23.

Recent business update

As per the company’s AGM trading update released on May 16, 2024, The company achieved a 6.5% year-over-year organic revenue growth for the four months ending on April 30, 2024. Additionally, there was a 5.2% increase in revenue on a reported basis and a 5.4% increase on a constant currency basis in the same period.

Company outlook

The company's diverse range of products and strong demand in its chronic care divisions, coupled with a promising lineup of innovative new offerings, bolster management's optimism about the group's outlook over the medium term. The management is committed to achieving annual organic revenue growth of 5-7%, aiming to elevate the adjusted operating margin to the mid-20s by 2026 or 2027. Additionally, the company is focused on delivering double-digit compound annual growth in both adjusted earnings per share (EPS) and free cash flow to equity in the coming years.

Top 10 shareholders

The top 10 shareholders of CTEC together hold approximately 48.19% of the total shares in the company. Leading this group is Novo Nordisk Foundation, which owns about 19.29% of the shares, followed by Artisan Partners Limited Partnership with approximately 4.78% stake, as illustrated in the chart provided.

Stock performance

Over the past month, CTEC's stock has shown a modest increase of approximately 1.77%. However, over the preceding six-month period, it has experienced a slight decline of around 0.19%. Notably, the stock's 52-week trading range has spanned from a low of GBX 195.30 to a high of GBX 295.20.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 10 July 2024. The reference data in this report has been partly sourced from EODHD/Others.