Highlights

  • Convatec’s H1FY24 operating profit rose by 20.9% YoY, reaching USD 149.2 million
  • Convatec declared an interim dividend of 1.82 US cents per share, marking a 3.0% increase from the previous year’s 1.77 US cents.
  • The company anticipates double-digit adjusted EPS growth in FY24, driven by a stronger second half and flat year-over-year financing costs.

ConvaTec Group PLC (LSE:CTEC) is an FTSE 100-listed medical products and technologies company. The company is employed in developing, manufacturing, and selling of medical products.

For the first half of FY24 (H1FY24), Convatec reported a revenue of USD 1,113 million, reflecting a 5.5% increase compared to USD 1,055 million in H1FY23. Operating profit for the period rose by 20.9% YoY, reaching USD 149.2 million, compared to USD 123.4 million in H1FY23. Diluted earnings per share increased by 40.7% YoY, from 2.7 US cents to 3.8 US cents. Additionally, Convatec declared an interim dividend of 1.82 US cents per share, marking a 3.0% increase from the previous year’s 1.77 US cents.

Recent Business Update

In its trading update for the ten months ending 31 October 2024, Convatec emphasised its strategic investment in homecare capabilities and its strong leadership position in hydrophilic catheters. These areas are expected to benefit from the introduction of new reimbursement codes in the United States, set to take effect in 2026. While there remains some uncertainty regarding the potential inclusion of Convatec’s InnovaMatrix® product in Medicare coverage, the company continues to express confidence in its long-term growth prospects.

Company Outlook

Convatec has maintained its FY24 guidance for interest expense in the upper half of the USD 75-85 million range. It expects an adjusted book tax rate of approximately 24%, with a cash tax rate of around 18%. The company anticipates double-digit adjusted EPS growth, driven by a stronger second half, supported by flat year-over-year financing costs.

It also forecasts a year-end net debt to adjusted EBITDA leverage ratio of around 2.0x, supported by strong cash generation. Capital expenditure is expected to be between USD 120-140 million, with cash adjusting items around USD 20 million for FY24.

Top 10 Shareholders:

The top 10 shareholders of CTEC hold around 51.37% of total shares. Novo Nordisk Foundation   is the largest shareholder with approximately 19.29% stake. Fidelity International follows with about 5.10% shareholding, as shown in the chart below.

Price Information

The stock price of CTEC has risen by approximately 6.48% over the past month but has declined by about 5.28% over the last six months. It has a 52-week low of GBX 211.80 and a high of GBX 295.20, with the current price trading below the average of these two figures. As of 28 November 2024, the stock’s closing price stands at GBX 236.6.

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 28 November 2024. The reference data in this report has been partly sourced from EODHD/Others.