17th Nov 2008 07:00
For immediate release 17 November 2008
Devro plc
Interim Management Statement
Devro plc, the world's leading manufacturer of collagen products for the food industry, today provides an Interim Management Statement in respect of the period from 1 July 2008 to date.
The Group has continued to demonstrate an improved performance, with most areas on or ahead of target, and the Board is confident that the performance for the year will meet its expectations.
Recent trading has continued the encouraging improvements seen in the first half of the year. Demand for edible collagen remains strong despite economic difficulties worldwide. Sales are showing good growth, particularly in Europe and the Asia/Pacific region. Collagen gel sales in the US are also strong.
Overall sales revenues have benefited from translational exchange gains, with sterling being weaker and the US dollar stronger, partly offset by a weaker Australian dollar. Average selling prices are higher than the corresponding period last year, and continuing to show a positive trend.
We indicated at the announcement of the half year results that energy would be costing around £2m more than last year in the second half. Energy costs have fallen since we made that estimate, but we expect only a marginal improvement in the second half, because of the contracts we have in place. We also indicated that hide supplies were subject to a degree of uncertainty; these have now been secured well into 2009, albeit at higher prices.
Manufacturing performance is showing considerable improvement compared with previous years, with output in all plants contributing to better factory efficiencies.
We continue to see good demand in most of our markets and stability in our manufacturing operations. In order to take advantage of the continuing growth in demand for collagen casings, we are likely to be increasing investment in capacity during 2009.
The Group's overall financial position remains strong and we are operating comfortably within our banking facilities. Net debt has decreased since 30 June as a result of the Group's strong cash generation.
The Group expects to report its preliminary results in mid February 2009.
For further information, please contact:
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Devro plc |
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Peter Williams, Finance Director |
01236 879191 |
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Buchanan Communications |
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Charles Ryland/James Montgomerie/Carrie Clement |
0207 466 5000 |
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