ConvaTec says pandemic created both challenges and opportunities in 2020

In the year to the end of December, earnings before interest and tax nudged down 1.1% to $350m, while revenue rose 4% to $1.89bn.

ConvaTec proposed a dividend of 3.98 cents, taking the full-year dividend to 5.7 cents, in line with 2019.

The group said its performance was driven by strong growth in the Infusion Care and Continence & Critical Care businesses, offsetting limited growth in Ostomy Care and a decline in Advanced Wound Care.

The company’s fourth-quarter revenue performance reflected the impact of the Covid-19 resurgence late in the year, it said. This was driven primarily by better-than-expected revenues in Continence & Critical Care.

"Parts of our business were negatively impacted, with a sharp reduction in surgeries and restricted access to hospitals, whilst other parts benefitted as Covid-19 stimulated incremental demand," ConvaTec said.

"The overall impact of Covid-19 was broadly neutral on the topline. From a profit perspective we incurred some additional costs owing to the pandemic although costs such as travel and advertising and sales promotion were lower than normal and we chose to adopt prudent cost management during a year of uncertainty. We also made the decision to proactively re-phase certain investments into 2021."

The company said its outlook was positive and its expects to see 2021 organic revenue growth of between 3-4.5% and a constant currency adjusted EBIT margin of 18-19.5%.

Chief executive Karim Bitar said: "There is still further work ahead for the group as we continue to strengthen our foundations and begin to pivot to sustainable and profitable growth, but I am confident in the inherent attractiveness of the markets we serve and in ConvaTec's growth prospects."

At 0830 GMT, the shares were up 3.7% at 195.70p.

Broker Peel Hunt said the market should react positively to the results, given the weakness of the shares into the numbers and the nervousness some investors expressed about what the release might say in view of lingering Covid-19 effects in healthcare.

It said the results were "robust", with "very strong" organic growth for the group of 4% versus guidance for top end of the 2-3.5% range, consensus of 3.5% and Peel Hunt's 3.3% estimate.

"This resulted in a 1% beat versus forecasts at the top line versus consensus. EBIT of $350m came in slightly above company-gathered consensus of $349m and modestly under our $353m expectation," it said.