27pc share slump rocks medical tech pioneer
Medical technology firm CONVATEC saw its share price fall more than a quarter after it warned on revenue growth. The company, which makes products for stomas and wound care, has revised its expectations for the year down after supply issues. delays to obtaining regulatory certification and manufacturing lines are expected to drag on profit margins.
CONVATEC had enjoyed a strong third quarter, posting revenue of £335m – an improvement of 6.8pc on the year before.
But it now expects organic revenue growth for the year to be between 1 and 2pc, down from its previous estimate of 4pc.
The final outcome will depend on resolving supply issues and being able to fulfil its back orders over the coming three months.
Revenue in the firm’s ostomy care business is down 1.8pc on last year as a result, although the infusion devices division, which includes insulin pumps, has seen revenue grow 17.3pc to £52.2m in the three months to September 30. Group chief executive Paul Moraviec said he was ‘disappointed’ with performance and that the costs associated with the issues had affected the firm’s margin improvement programme.
Shares plunged 26.6pc, or 74.3p, to 205p, the greatest faller of the day. The FTSE 100 closed down 0.1pc, or 8.47 points at 7526.97. even a strong performance from the miners couldn’t keep the market in the black. among the top risers of the day,
Antofagasta advanced 1.9pc, or 19p, to 1034p, and Glencore gained 1.5pc, or 5.8p to 382.4p.
Russ Mould, investment director at AJ Bell, said commodities firms were boosted by a dip in the dollar. ‘any weakness in the greenback is always seen as good for commodities as most raw materials are priced in the US currency, so when it goes down they are cheaper to buy,’ he says.
as well as that, china looks to be on track to meet its economic growth targets, which means investors are confident that demand for commodities from the region will remain strong.
Low & Bonar said operational issues were now ‘firmly behind’ the firm and it is working to rebuild its customer relationships and restore its profit margin.
But the materials firm, which makes industrial yarns and fibres, warned it was still battling rising raw materials prices, not helped by recent hurricanes in the US.
But with a major storm blowing in the UK, investors were jittery about the potential effect of ongoing bad weather on the business. Shares dropped 15.7pc, or 12.5p, to 67.25p.
at the other end of the smallcap market, Acal anticipates fullyear earnings to be ahead of expectations. The electronics parts supplier said that revenues in the six months to September 30 were up 21pc on last year, at £190m, after new project wins and acquisitions. Shares surged 6.6pc, or 20.75p, to 334.5p.
Bioventix shareholders are set for a 40p special dividend after full-year figures at the firm showed pre-tax profit had climbed 37pc to £5.7m and revenue had increased 31pc to £7.2m.
The firm, which manufactures antibodies, said results for the year to June 30 were ‘excellent’. But investors are concerned about the loss of around £1m in revenues after the expiry of a licence on a product earlier in the year. Shares lost 0.5pc, or 15p, to 2750p.
Springfield Properties shares sprang up on their first day of trading yesterday.
The Scottish housebuilder, which has developed more than 4,000 homes, floated on aim yesterday after raising £25m from investors, and shares soared 9.9pc, or 10.5p, to 116.5p.