(Reuters) - Shares of ConvaTec plunged on Thursday after the medical devices maker reported “disappointing” annual results and launched a turnaround plan, which would include a $150 million (117 million pounds) investment over three years to boost sales and profit.
Shares of the company plummeted 19 percent to the bottom of the FTSE mid-cap index.
The company, whose chief executive left after a sales and profit warning in October, said it would focus on products and market segments that offer the best returns, develop a strong pipeline of new products and simplify its business.
“These are disappointing results, in light of our revenue and margin guidance at the beginning of 2018,” CEO Rick Anderson said in a statement.
The company was just finding its footing after logistical issues and recalls that dented income last year, when a change in inventory policy by a leading customer, named by analysts as Medtronic, forced it to trim earnings outlook in October.
Including the costs related to its transformation plan, Convatec forecast operating profit margin of 18-20 percent for fiscal 2019, lower than the 23.4 percent for 2018.
Full-year adjusted operating profit fell 6 percent to $429.4 million, hurt by lower orders for its infusion devices in the fourth quarter due to Medtronic’s inventory policy change.
The company said that Brexit could impact sales in all European Union countries, its production plants in the EU and the UK and its logistics hub in the Netherlands, but was making plans to stock up to deal with any potential supply disruption.
Reporting by Devika Syamnath and Arathy S Nair in Bengaluru; Editing by Patrick Graham and Arun Koyyur