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(Alliance News) - ConvaTec Group PLC on Thursday lifted annual guidance and said recent foreign exchange movements will boost its margins, but keep a lid on revenue.
Shares in the company were 3.7% higher at 219.60 pence each in London on Thursday morning, among the best FTSE 100 performers.
The Reading, England-based medical products and technologies company said revenue in the 10 months to October 31 rose 2.4% year-on-year, slowing from a 3.6% hike in the first-half. Revenue growth was hindered by foreign exchange movements, ConvaTec said.
Still, ConvaTec upped its 2022 organic revenue growth guidance to a 5.4% to 5.8% range, from previous a 4.0% to 5.5% forecast.
The company said inflation in raw materials and freight has "moderated" recently. However, utilities and labour costs have risen. ConvaTec still expects costs of goods sold inflation of 8%-9% for the year and a currency adjusted operating profit margin of at least 18%.
"Foreign exchange rate movements have been volatile in recent months. The FX impact on 2022 is currently estimated to be a [roughly] 6% headwind on revenue growth with a [roughly] 90 basis points tailwind to the earnings before interest and tax margin," the company said.
"On this basis, we expect to publish an adjusted operating profit margin of over 19%."
By Eric Cunha; ericcunha@alliancenews.com
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