Convatec shares plummeted more than 36 per cent this morning on news of a profit warning and the chief executive’s departure.
The medical equipment manufacturer slashed its growth forecast for the year, and cut its underlying earnings expectations too in a trading update today.
Growth is now expected to be flat, compared to guidance of 2.5 per cent to three per cent previously, while adjusted underlying earnings were revised down to between 23 per cent and 24 per cent, from 24 per cent to 25 per cent.
Convatec blamed a change in “inventory policy” from its biggest customer for infusion devices - which it sells to firms manufacturing insulin pumps for diabetics - for the reduced guidance, expecting it to impact revenues by between $18m (£13.7m) and $23m.
“Challenging” market dynamics in Convatec’s advanced wound care division were also expected to hit revenue.
Meanwhile, chief executive Paul Moraviec informed the board of his plans to retire immediately, with non-executive director Rick Anderson stepping in as interim chief executive as the board searches for a successor.
"We have made significant progress during my time as chief executive officer and I am confident that Convatec now has the strong platform, infrastructure and leadership to enable the business to flourish,” Moraviec said.
“I would like to thank all my colleagues across Convatec for their hard work and dedication, they have taken Convatec to a leading position in the MedTech industry and I look forward to watching the company's future success."
The board said it “continues to have confidence in the fundamentals of the business and its future potential”.
Convatec shares were trading at 142.3p this morning, down from a peak 342.6p in June 2017.