Devro profit sizzles 25% higher despite revenue slip

Glasgow-based sausage skin and collagen products firm Devro said on Wednesday its first-half profit before tax rose 25% to £13.6 million despite revenue slipping to £119.2 million from £120.2 million at the same stage last year.

Devro said strong volume growth in China (+19%) and North America (+10%) was offset by expected weaker performances in Japan (-3%), Russia & East (-9%) and Latin America (-30%).

Devro CEO Rutger Helbing said: “We continued to make good progress on our strategic priorities in the first half.

“We delivered manufacturing efficiency improvements, in particular with increased speeds at our US plant.

“Our commercial and product development teams continue to establish the building blocks to accelerate future growth through the rollout of our new Fine Ultra product platform and developing new categories in China.

“For the full year, we continue to expect volume and revenue growth to be weighted towards thesecond half, supported by a number of commercial initiatives to accelerate growth and the continued rollout of our Fine Ultra product platform.

“We also now expect our total cost savings programme to exceed our previously stated target.

“At current FX rates operating profit will benefit from foreign exchange gains in the second half.

“Despite weaker market sentiment in some mature markets and ongoing pressures from input cost inflation, the board believes that Devro continues to be well placed to make good progress in 2019 and the full year outlook remains unchanged.”

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Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.