Devro turns in solid performance
Despite sliding profits in the first half of the year, Devro has released its third-quarter (Q3) statement showing trading is “in line with expectations”.
The sausage casings manufacturer said trading was as expected from 1 July 2014 to the present and it would make no changes to its yearly trading predictions. This was echoed by market analyst Investec, which said Devro’s trading statement showed a solid performance from the business.
Devro reported increased demand was helping to improve profits: “The business has now had two quarters of growing sales volumes year-on-year (YOY), most notably in China, Japan and Germany, with demand generally showing signs of improvement.”
The business reported a 23% decline in profit on last year for the first six months of the year. This was despite restructuring of its facilities in Scotland, where the business reported the first stage to be complete. This has involved the decommissioning of old lines and up to 130 job losses.
Restructuring is also taking place at its site in South Carolina, USA, over an 18-month period, to address the older plant’s “underperformance”. As a result, some functions have been moved to a site in the Czech Republic, reported Investec.
“After a weaker start to the year on volumes, Q3 has continued to see an improvement YOY in volume performance. In some instances, the group has been a little more tactical on price, so our assumption of a broadly flat overall revenue performance on a constant currency basis remains sound,” Investec reported.
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