Devro bullish on 2019 outlook

Devro, the Lanarkshire-based supplier of sausage skins and collagen products to the food industry, has given an upbeat outlo ok for the year despite “challenging conditions” in some of its key markets.

The firm told investors that trading in the year to date was in line with its own expectations, with momentum building after a “slower start to the year”.

In a brief trading update to coincide with its annual shareholder meeting, Devro noted: “We continue to see good trading in North America, South E a s t As i a a n d C h i n a , o f f s e t by ongoing challenging conditions in Russia, Japan and Latin America.

“As previously indicated, we expect 2019 revenue growth to be [second-half ] weighted, as it will benefit from the build in sales of Fine Ultra, as well as underlying market growth.”

It added: “Our cost saving initiatives are on track and we are confident of being able to meet the previously outlined targets. Devro remains well placed to make good progress during 2019.”

T h e M o o d i e s b u r n - b a s e d g r o u p a l s o c o n f i r me d t h a t Gerard Hoetmer was retiring as chairman at the conclusion of the AGM. It said the search for a replacement chairman w a s “we l l a d v a n c e d ” w i t h t h e b o a r d s e t t o m a k e a n announcement “in the near future”. Current senior inde - pendent director Paul Withers will serve as interim chairman until a successor is appointed.

In February, Devro reported a fall in annual profits as rising costs and lower sales in Russia and the Far East hampered performance.

The firm revealed pre -tax profits of £17.5 million for the year ending 31 Decemb er, a drop from £21.6m in 2017.

Revenues dipped by £3.5m to £253.4m on the back of weaker sales of its legacy product and “market challenges” in Russia and Japan, where volumes dropped 12 per cent and 7 per cent, respectively. The group also repor ted higher excep - tional items of £12.3m.