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ConvaTec lowers sales growth expectations on supply issues

Convatec Group Plc revised its sales growth expectations, citing supply issues in two of its business segments and lower than anticipated revenue contribution from new products.

The company — which made headlines as London's largest IPO in 2016 — now anticipates full-year organic revenue growth of between 1% and 2%, down from 4% previously.

Convatec Group made limited progress in fulfilling backorders in the advanced wound care business segment due to delays with logistics, including hurricanes disrupting shipping lanes in the Caribbean.

The company moved its manufacturing lines from Greensboro in the U.S. to Haina in the Dominican Republic, which also caused some delays in securing regulatory approvals. The same was also true for the movement of the final two manufacturing lines in the ostomy care business segment.

Convatec said it had lost some business due to the build-up of backorders, which it is addressing and expects to resolve by the end of the fourth quarter.

Convatec shares were down to £2.05 as of market close on Oct. 16, the day the company revised its sales expectations. The company's stock closed at £2.793 on Oct. 13, the last business day before the announcement was made.