ConvaTec announce an interim dividend of 1.717 cents declared

DividendMax Ltd.

ConvaTec announce an interim dividend of 1.717 cents declared

The ConvaTec Board is declaring an interim dividend of 1.717 cents per share, in line with the 2020 interim dividend. The Board maintains its stated policy of 35% to 45% of adjusted net profit for full year dividends.

Other financial highlights include:

Strong revenue growth ahead of their expectations: +7.4% organic growth, +7.0% on a constant currency and +11.0% on a reported basis

o H1 2021 performance was driven by particularly strong growth in Advanced Wound Care, against the weak COVID-depressed comparative, coupled with good growth in Infusion Care and solid performances in Continence & Critical Care and Ostomy Care 

Continued progress with their transformation by executing on their FISBE (Focus, Innovate, Simplify, Build, Execute) strategy:

o Strengthened Continence Care with acquisition of Cure Medical

o Launched innovative and differentiated extended wear infusion set

o Establishing Marketing and Quality Centres of Excellence

Reported operating profit of $136m, 19.9% higher year on year, with adjusted EBIT of $204m, 17.0% higher on a constant currency basis, reflecting the strong revenue growth together with gross margin improvement and beneficial opex phasing. 

Reported Free Cash Flow ('FCF') of $106m (H1 2020: $145m) with adjusted FCF of $114m (H1 2020: $148m). Adjusted cash conversion of 56.6% (H1 2020: 72.9%) primarily reflecting working capital movements during the period and increased capital investment.

Strong balance sheet: leverage of 2.0x Net Debt/Adjusted EBITDA (H1 2020: 2.2x; FY 2020: 2.0x).

2021 full year outlook is updated: organic revenue growth of between 3.5-5% (previously: 3-4.5%) and a constant currency adjusted EBIT margin of 18-19% (previously: 18-19.5%). Based on current FX this would equate to guidance of between 17.1-18.1% for the published adjusted EBIT margin.  

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