Supply-chain hit medical firm ConvaTec Group has announced Q3 revenue of $445.5m, 6.8% up on Q3 2016. It said the growth equalled 5.1% at constant exchange rates and 3.3% organic growth.
ConvaTec said its expected full year growth would be 1% to 2%, if it can resolve “remaining supply issues, fulfilment of backorders and recovery of orders in both Advanced Wound and Ostomy Care in the fourth quarter”.
Dominican Republic delays
The trading statement this morning said: “The supply issues principally relate to the movement of Advanced Wound Care manufacturing lines from Greensboro in the US to Haina in the Dominican Republic, including delays in obtaining regulatory certification, as well as the movement of the final two Ostomy manufacturing lines.
“The costs associated with these supply issues are expected to result in the loss of the 40 bps of margin benefit achieved as a result of the MIP programme in the first half of this year, and the majority of the 90 bps delivered in 2016.”
Despite the decline in revenue expectations, ConvaTech said it expect to cut adjusted operating costs to 35% of full year revenue, compared to 37% in the first half of the year.
The company said: “Once the supply issues in Haina are resolved the group expects to be able to achieve progress on margin improvement.”