Investors are right to be sceptical of ConvaTec — the medical devices specialist is an expert in false starts. Chronic underinvestment in research and development and supply chain mis-steps have added up to inconsistent sales growth during the group’s life as a public company.
That, in turn, has left the shares almost a fifth below the 2016 float price of 225p. The question now is whether a revised strategy focusing on product range and increasing operating efficiencies will be enough to lift the stock out of the doldrums. That’s no sure thing: the risks to profit progress aren’t reflected in a forward earnings multiple of 22, a touch above the average for the shares since Karim Bitar was appointed chief executive almost three years ago.
