Devro benefits from weakened sterling in first half of 2016
Casings producer Devro has reported a stable first half of the year.
The group’s overall revenue for the six months to 30 June remains unchanged compared to the previous year. Its underlying operating profit is £2.4m ahead of the same period in 2015.
The main reason for the increase in operating profit was attributed to input cost reductions of £2.1m, mainly related to reductions in hide prices and energy costs.
It did report that while global sales volumes were down 7% year-on-year, this was compensated for by improved manufacturing efficiencies in Scotland and Australia, lower input costs and exchange rate benefits such as the weakened pound.
The business’ revenue in the UK & Ireland was broadly in line with the previous year, which the board deemed “a good performance in this mature market”.
Peter Page, chief executive of Devro, said: “Underlying operating profit was ahead of prior year for the first half. Improved manufacturing efficiencies, lower input costs and exchange rate benefits more than offset the effects of reduced year-on-year sales volumes.
“The board’s expectations for the full-year underlying operating profit remain unchanged.”
Page said the business will now focus on new products as its global transformation programme wraps up. The programme, which includes production facilities in the US and China, is set to be completed by the end of 2016.
“The transformation programme has reached its final phase,” he said. “The next stage of strategic development will focus on growing sales through improved commercial capabilities, introducing the next generation of differentiated products and further improving manufacturing efficiencies.”
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