Convatec maintains guidance, shares slide on InnovaMatrix headwinds

(Sharecast News) - Convatec shares fell on Thursday despite the company saying it had made a good start to 2026, with broad-based growth across its chronic care categories and full-year guidance unchanged.

Shares in the medical products group were down almost 6% in early trading, suggesting investors focused on slower reported organic growth once the impact of InnovaMatrix was included, as well as the phasing of growth towards the second half.

The FTSE 100 firm said organic revenue growth excluding InnovaMatrix was 4.8% in the four months ended 30 April.

Including InnovaMatrix, organic revenue growth was 1.6%, while reported growth was 5.5%, helped by a foreign exchange translation benefit from the year-on-year depreciation of the dollar.

The company said it remained on track to deliver 5% to 7% organic revenue growth excluding InnovaMatrix for 2026, with growth expected to increase in the second half because of customer order phasing and as product launches build.

Advanced wound care delivered mid-single-digit growth excluding InnovaMatrix, led by Latin America and Asia-Pacific, with solid growth in Europe and North America slightly higher against a strong comparative.

The company said ConvaFoam continued to gain share.

However, Convatec reiterated that InnovaMatrix was expected to represent a roughly 3% group revenue headwind in the first half and about 2% for the full year, with 2026 revenue still estimated at around $20m.

Ostomy care grew at a mid-single-digit rate, led by Europe and Latin America, while the company reported solid new patient volumes in its US Home Services Group.

Its new soft convex product, Esteem Body, continued to gain share.

Continence care also grew at a mid-single-digit rate, driven by new patient volumes in the Home Services Group and strong growth outside the US, supported by customer service.

GentleCath Air for Women continued to gain share.

Infusion care grew at a mid-to-high-single-digit rate, led by newer customers and therapies, particularly Neria Guard for AbbVie's Parkinson's treatment.

Convatec said infusion care growth was expected to accelerate in the second half due to order phasing.

The group reiterated guidance for an adjusted operating profit margin of at least 23.0% and double-digit adjusted earnings per share growth in 2026.

Its medium-term targets remained organic revenue growth of 6% to 8% from 2027, double-digit adjusted EPS growth and an adjusted operating margin in the mid-20s percentage range by 2027.

Chief executive Jonny Mason said Convatec had delivered a good start to the year and remained on track to meet full-year guidance.

"We saw further broad-based growth across our chronic care categories, as new product launches continued to gain share," he said.

Mason said the company's Accelerate strategy, announced last month, would drive improved execution and support sustainable 6% to 8% revenue growth from 2027 and a double-digit adjusted EPS compound annual growth rate.

Convatec said it was investing in growth capital expenditure across all categories as its innovation pipeline accelerates and manufacturing scales up.

It also said it had signed its first patch pump supply agreement, broadening its ability to support diabetes patients alongside its durable pump infusion care set offering.

The company said its 2026 guidance assumed no material deterioration in the macroeconomic environment, while it continued to monitor the situation in the Middle East.

At 0956 BST, shares in ConvaTec Group were down 5.88% at 201.6p.

Reporting by Josh White for Sharecast.com.

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