Medical supplier Convatec wounded by profits fall

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Medical equipment firm ConvaTec was the FTSE 100’s largest faller today, after announcing a slide in profits

ConvaTec’s shares plunged down more than 7pc at £2.89, on news that underlying operating profits over January to June had fallen 7pc to $193.5m (£146.3m), down from $209m the earlier year.

Sales went up gradually to $831.3m, up from $829m.

ConvaTec – a maker of wound dressings, ostomy bags and catheters – was London’s biggest initial public offering (IPO) a year ago, valued at £4.4bn.

Paul Moraviec, the CEO, said the firm had a “solid start to the year” yet was expecting developments in the second half.

He stated: “We are confident for the future and delivering our full-year guidance, with accelerating growth in the second half underpinned by a growing contribution from new products and the unwinding of first-half timing impacts.”

“We’re on track for where we expected to be. We always said sales would be second-half weighted,” he included.

Mr Moraviec said the firm would utilise its clout as an openly listed organisation to potentially fund further “bolt on acquisitions”.

David Cox, an analyst at Panmure, remarked that production issues in ConvaTec’s wound care business and higher-than-anticipated working expenses had slowed down income.

He said: “The H2 organic growth target to meet guidance looks like a big ask.”

Published operational profit, including one-off expenses, was up 58pc to $92.8m.

The firm likewise announced that its CFO, Nigel Clerkin, was leaving and will be supplanted by former General Electric Healthcare official Frank Schulkes.

ConvaTec said it had chosen to move the CFO from Dublin to London and that Mr Clerkin had opted to leave the organisation instead of moving his family.

Mr Schulkes, who was most recently CFO of private German industrial business Wittur Group, will assume control over the position at ConvaTec toward the end of October.