Devro H1 revenue up 8.3% to £130m but profit slips

Glasgow-based sausage skin and food collagen products firm Devro said its revenue rose 8.3% to £129.8 million in the six months ended June 30, 2022, but profit before tax slipped to £15.9 million from £18.4 million.

Interim dividend will rise to 2.9p from 2.8p.

“Our balance sheet strength provides us with the flexibility to fund our organic growth, make targeted investments, increase our dividend and consider strategically relevant bolt-on acquisitions while having significant comfort in our financial position,” said Devro CEO Rutger Helbing in his review.

The CEO added: “The group has again delivered good volume growth at 4.5%, which was held back by capacity constraints especially as productions lines in China and Czech were upgraded during the second quarter.

“Those lines are now functional and operating well, providing additional capacity for the second half.

“Mature markets performed better than emerging markets in this period with North America and Continental Europe the standout performers at 14.8% and 18.7% revenue growth respectively.

“Mix, both geographical and customer, was a positive contributor to revenue growth in the period. This partly reflects our decision to prioritise selling China-produced volume in other markets, where we achieve higher prices.

“We will continue to do this.

“From a geographical perspective, mature markets grew constant currency revenue 9.1% with volumes up 7.6% while emerging markets were up 6.2% with volume down 0.9% reflecting our capacity investment and the impact this had on production in the period, phasing of distributor orders and tougher comparators, with strong growth of 10% in H1 2021.

“We are pleased with the emerging markets pricing recovery.

“Overall, we are pleased with our revenue performance in what continue to be robust end markets.”