Convatec Group Plc (LON: CTEC), the FTSE 100 medical products group focused on chronic-condition care, reported interim revenue up 4.4% to $1,232m for the six months to June, with organic growth of 5.0% excluding its InnovaMatrix wound-care product, in line with its target range.
Convatec shares closed at 225.4p on Monday, unchanged on the day, against a 52-week range of 193p to 255.6p. Price at open this morning is 226.4.
The headline growth conceals a near-total collapse in InnovaMatrix, a skin-substitute product used in wound care, after the US Centers for Medicare and Medicaid Services cut its Medicare reimbursement rate by more than 85% from 1 January. Revenue from the product fell by more than 90% from $39m in H1 2025, forcing a $69m non-cash impairment. That impairment drove reported operating profit down 36.1% to $115m, and cut reported operating margin to 9.3% from 15.2% a year earlier.
On the adjusted basis management uses to guide the market, the picture is steadier: adjusted operating margin held at 21.2%, against 21.3% a year earlier, while adjusted diluted earnings per share rose 6.3% to 8.5 cents. Reported diluted EPS, by contrast, fell to 2.7 cents from 5.1 cents. Convatec narrowed its full-year organic growth guidance, excluding InnovaMatrix, to 5.5-6.5%, kept its adjusted margin target above 23%, and reiterated double-digit adjusted EPS growth.
Chief executive Jonny Mason said: “Convatec delivered further broad-based and resilient growth across our chronic care categories. We are on track for another year of margin expansion and double-digit EPS growth.” The company also announced a new $200m share buyback, on top of the $300m completed in 2025, taking cumulative repurchases to $500m across the two years, alongside a 15% increase in the interim dividend.
Net debt rose to $1,534m, taking net debt to adjusted EBITDA to 2.3 times from 1.9 times a year earlier, with management targeting around 2.0 times by year-end. Free cash flow to equity before growth spending fell to $22m from $98m, which Convatec attributed to normal seasonal working-capital swings it expects to reverse in the second half.