Devro revenue rises as it regains market share
Food-grade collagen manufacturer Devro announced its results for the year to 31 December on Monday, with unaudited revenue rising to £241.1m from £230.2m in 2015.
Devro
329.00p
17:15 13/04/23
Food Producers & Processors
7,621.47
17:10 19/04/24
FTSE All-Share
4,296.41
17:08 19/04/24
FTSE Small Cap
6,331.12
17:04 19/04/24
The London-listed company reported underlying EBITDA of £58.8m, improving from £49.7m, while underlying operating profit was firmer at £38.1m, against £33.3m.
Underlying profit before tax fell marginally to £28.9m, from £29.2m, with underlying basic earnings per share down to 13.3p from 15.4p a year earlier.
Devro’s board confirmed a total dividend per share of 8.8p, in line with the prior year.
On a statutory basis, the company’s operating profit fell to £15.4m from £19.2m, and its profit before tax more than halved to £6.2m from £15.1m.
Its statutory basic earnings per share were 1.3p - a fraction of the 8.8p posted in 2015.
“Whilst volumes declined by 6.6% year-on-year, underlying operating profit increased due to lower input prices and exchange rate benefits,” said chief executive Peter Page.
“The decline in sales volumes in 2016 was due to a series of region-specific factors. We have taken actions to ensure a return to growth in 2017 and beyond.”
Page explained that, following the significant capital investments made in recent years, the company was now focused on using its high-technology assets to supply a growing global market.
“Overall demand remains strong and we continue to see many attractive opportunities to grow the business.
“In 2017, we will focus on increasing revenue to regain market share, achieving cost savings across our global operations and commencing the launch of new, differentiated products, as part of the Devro 100 programme.”
The further exceptional costs of the programme were expected to be between £10m and £12m over the next two years, plus capital investments of between £7m and £8m, with expected benefits of between £13m and £16m per annum by 2019, Page added.
“Over this period there will also be a focus on reducing net debt levels.
“Combined with our upgraded global manufacturing asset base, we are confident this will deliver long term growth.”