Shares in ConvaTec Group PLC (LON:CTEC) dropped on Friday morning as the colostomy bag maker’s sales dropped in the first quarter, hit by falling demand in the Americas, its biggest market.
Total revenue for the three months ended 31 March slipped 6.0% to US430.6mln (Q1 18: US$458.2mln).
Shares were down 3% to 132.5p in early deals on Friday.
READ: Citi initiates coverage on ConvaTec with a ‘neutral’ rating
Sales in the Americas, which account for more than half of the business, fell 5.7% to US$220.9mln (Q1 18: US$234.3mln).
Closer to home, revenue in Europe, the Middle East and Africa (EMEA) fell 8.0% to US$176.9mln (Q1 18: US$192.2mln), not helped by “challenging market dynamics” in the UK.
Compounding the woes was an 11.8% slump in sales in the advanced woundcare division, the company’s biggest unit.
Despite the top-line fall across the board – the tiny APAC market was the only region or division to see any growth – ConvaTec repeated its full-year guidance.
It still expects to deliver organic revenue growth of 1.0-2.5% in 2019, and an adjusted EBIT margin of 18-20%.
February update flagged issues
ConvaTec had flagged its struggles in February as it set out a series of initiatives to turn around its fortunes after a “disappointing” set of annual results.
A month later, reports emerged of potential takeover interest for the firm, whose stock fell by a third last year.
“Trading in the first quarter was in-line with our expectations, which reflect the challenges we outlined at our full year results in February,” said chief executive Rick Anderson, who will be replaced by Karim Bitar later in the year.