A raft of exceptional items relating to its three-year restructuring programme hammered full-year results from sausage-casings maker Devro (DVO). And even stripping out £23.9m of one-off costs, operating profit fell by an eye-watering 28 per cent to £30.3m. That decline was caused by two things: the decommissioning of old assembly lines and foreign exchange movements, which together knocked £10.9m from operating profit.
Yet these restructuring initiatives, expensive though they are, are turning Devro into a leaner, more efficient producer. Chief executive Peter Page said he was pleased with last year's results: volumes grew in the second half to end the year 3 per cent higher, while sales rose 2 per cent at constant exchange rates. The new year has also started well. The sales momentum has continued, order levels are good, raw material prices are stabilising and costs will soon start to come down.
That said, plenty of hurdles remain, not least a £1m-£2m currency drag, uncertainty in Russia, which contributes 7 per cent of group sales, and a higher tax charge. That has prompted N+1 Singer to downgrade its EPS forecasts for 2015 to 15p (from 16p) from 14.6p in 2014.
| DEVRO (DVO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 277p | MARKET VALUE: | £462m | |
| TOUCH: | 276-277p | 12-MONTH HIGH: | 316p | LOW:205p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 107 | |
| NET ASSET VALUE: | 80p | NET DEBT: | 52% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 214 | 54.0 | 25.4 | 7 |
| 2011 | 228 | 43.0 | 20.8 | 8 |
| 2012 | 241 | 39.3 | 19.4 | 8.5 |
| 2013 | 243 | 37.5 | 20.1 | 8.8 |
| 2014 | 232 | 2.2 | 2.6 | 8.8 |
| % change | -4 | -94 | -87 | - |
Ex-div: 26 Mar Payment: 15 May | ||||
