In the six months to 30 June 2018, the company reported a dip in revenue from £125.2 million (m) in 2017 to £120.2m, while its underlying profit was up from £18.1m in 2017 to £18.4m. It has also reduced its net debt from £151.9m last year to £147.3m.
The business claimed wins in North America and China, with production performance improving in the former and average price increases in the latter. Overall volumes in its Asia-Pacific region were down 6% year-on-year due to low sheep gut pricing, but the business did start to see the benefits of the new Fine Ultra product platform, introduced to key customers in 2017, which will be fully rolled out in the second half of 2018.
Devro’s Continental Europe volumes were up 8% thanks to snacking growth in Germany and Poland, while the fresh market grew in Italy. The firm does expect business to be down in the second half of 2018 due to “weaker comparatives from H2 2017 and challenging economic conditions in Russia”.
Latin America proved to be a strong market for Devro, seeing 11% volume growth, which was driven by increased imports from its Nantong plant and the addition of new Brazilian customers.
Devro chief executive officer Rutger Helbing said: “We are making good progress in a range of markets, contributing towards our Devro 100 objectives of growing profitable revenue and market share, whilst reducing operating unit costs. In addition, we have significantly improved the North American plant performance, and increased the average selling price in China by 19% through migrating the customer mix towards those that value our differentiated products.
“Product development of the new Fine Ultra range remains a key focus and the product platform will enter commercial launch during H2 following completion of refinements to reflect local market preferences. The new product platform is an important building block of our growth ambitions, and will begin to be seen in H2 2018 and into 2019. We are focused on continuing to deliver Devro 100 and the board’s expectations for the full year remain unchanged.”