Devro hit by raw materials prices

Collagen casing company Devro has reported a challenging performance for the first half of 2013.

In its trading update for the first six months of the year, an increase in the price of raw materials was one of the factors affecting the company’s trade. Manufacturing issues in the US had also caused a drop in sales, particularly in the UK and Australasia.

However, city analyst Darren Shirley said total volumes across the group were reported to be ahead 1%, due to “steady growth in the USA and Canada”.

He added: “We also note management’s positive comments on the USA, with successful product testing and commercialisation on the development line enabling management to progress plans for reinvestment over the next three years.

“Therefore management expects further growth in sales through H2, and remains confident of a strong H2 performance and growth in full year earnings. However we remain more cautious as the H1 is worse than we had anticipated, and of particular concern is the lack of trading momentum in many key markets.”


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