5th Aug 2015 06:58
LONDON (Alliance News) - Devro PLC Wednesday reported a huge boost in profit and a rise in revenue in the first half of 2015 as it cut down on exceptional costs and benefited from a strong demand for its products.
Devro, which manufactures collagen products for the food industry, said that its pretax profit in the six months ended June 30 rose to GBP9.6 million from GBP1.6 million in the same period the year before, as exceptional costs were reduced GBP4.0 million from GBP10.8 million.
Revenue grew to GBP112.7 million from GBP109.7 million, which Devro said was underpinned by strong market demand for its products. It said volumes were particularly strong in China, Japan and South East Asia, and continued to grow steadily in North America, offsetting lower volumes in Russia and Latin America.
Devro will pay an interim dividend of 2.70 pence, which is flat year-on-year.
The company added that its three-year transformation programme continues to progress well and will be completed in 2016 as expected. The programme is intended to add capacity, align products with market opportunities, and reduce unit costs.
The restructuring of its operations in Scotland and Australia has also been completed, Devro said, which is on track to deliver an annual cost reduction of GBP5 million in 2015, while its investment projects in the US and China are advancing well and remain on track to commence production in 2016.
The investment projects in the US and China will increase costs in the second half of the year though, resulting in exceptional costs of between GBP16 million and GBP18 million for the full year, Devro said.
"Sales volumes have continued to grow in several important markets and prices remain firm. We have made good progress in transforming our manufacturing facilities to support future growth and manage costs, with restructuring completed and the major investment projects on track for completion in 2016. Market demand is strong, input costs are stable and productivity improving, giving confidence for the future," Chief Executive Peter Page said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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