Devro H1 revenue up to £120m; profit rises 36%

Shares of Glasgow-based sausage skin and food collagen products firm Devro rose about 3% on Thursday after it said its first-half revenue rose 0.8% on a reported basis to £119.9 million amid “foreign exchange headwinds.”

On a constant currency basis, revenue was up 3.1% to £122.7 million.

First-half profit before tax rose 36% to £18.4 million from £13.5 million in H1 of 2020.

Interim dividend rises to 2.8p from 2.7p.

Volumes of edible collagen casings were up 4.2% with emerging market volume up 10% driven by South East Asia, China and Latin America. Mature markets volume was up 1% driven by strong growth in North America offset by weaker market conditions in UK & Ireland and Australia.

Devro CEO Rutger Helbing said: “Devro’s constant currency revenue growth has accelerated and has driven significant profit growth in the first half, demonstrating the successful execution of the strategy, and we enter the second half with good momentum across the business, and confidence in our future prospects.

“In the shorter term, for the second half we expect the strong underlying performance to continue, however reflecting the uncertainties relating to COVID-19 pandemic and foreign exchange headwinds, the board’s full year expectations are unchanged.

“The board’s confidence in the group’s prospects and the continued strengthening of the balance sheet has resulted in an increase in the dividend for the first time in four years, as well as an incremental increase in investments required to facilitate the sustainable growth we foresee based on underlying market dynamics, as well as our targeted sales actions.”

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