Business
FY2017 guidance and third quarter update
FY2017 guidance and third quarter update.
About this update from Convatec Group Plc
[{"type":"text","content":"\n \nRNS Number : 6324T ConvaTec Group PLC 16 October 2017 \n\n \n \nThis announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014\n \nFY2017 guidance and third quarter update\n16 OCTOBER 2017 (LSE: CTEC)\n \nConvaTec Group Plc (\"the Group\") is today providing an update on trading in the third quarter and revising guidance for full year expectations for organic revenue growth and delivery of the Margin Improvement Programme (\"MIP Programme\"). \n \nIn the third quarter, Group revenue was $445.5 million, reflecting 6.8% reported growth on the same period in 2016, 5.1%[1] at constant exchange rates and 3.3%[2] organic growth. The Group also continued to expand its product portfolio across products and geographies. However, performance during the third quarter was severely impacted by supply issues in both Advanced Wound and Ostomy Care, and a lower than anticipated revenue contribution from new products.\n \nConsequently, the Group now anticipate full year organic revenue growth will be between 1% and 2%, with the outcome in this range being dependent on the degree of success in resolving remaining supply issues, fulfilment of backorders and recovery of orders in both Advanced Wound and Ostomy Care in the fourth quarter.\n \nThe supply issues principally relate to the movement of Advanced Wound Care manufacturing lines from Greensboro in the U.S. 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. \n \nAs expected and reflected in our previous guidance, Advanced Wound Care was impacted in the third quarter by the ongoing supply disruptions to manufacturing in Haina, which also affected the first half. However, less progress than anticipated was made in reducing backorders, with a consequent loss of some orders. The Group expects the Advanced Wound Care supply issues in Haina to be resolved by the end of the fourth quarter.\n \nOstomy Care also experienced supply constraints relate...