Devro (DVO) has made good progress in restoring volumes across markets where share was lost last year as the sausage skin company waited for its Chinese factory to open, dealt with the cost of imports in Russia, and lacked capacity in Southeast Asia. The opening of the plant in China helped boost volumes there by 125 per cent and increased revenue in the Asia Pacific region by a quarter. New products in Russia helped the region improve volumes by 19 per cent, while market expansion in Southeast Asia improved sales there by 40 per cent.
Chief executive Peter Page said new, region-specific products are due to launch, including a “fine ultra range” for consumers in Southeast Asia and China that allows them to fry sausages at particularly high heats while retaining their shape.
In North America some opportunities for growth identified by management are taking longer to come through than anticipated and so volumes here were flat on the previous year. Continental Europe was similarly flat as the business looks to regain market share it lost in the second half of last year.
Analysts at Numis expect pre-tax profit of £30.5m in the year to December, giving an EPS of 12.9p, compared with £31.2m and 13.3p in FY2016.
| DEVRO (DVO) | ||||
| ORD PRICE: | 229p | MARKET VALUE: | £383m | |
| TOUCH: | 229-230p | 12-MONTH HIGH: | 273p | LOW: 140p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 40 | |
| NET ASSET VALUE: | 72p | NET DEBT: | 127% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 113 | 0.3 | -0.7 | 2.7 |
| 2017 | 125 | 10.0 | 5.5 | 2.7 |
| % change | +11 | - | - | - |
| Ex-div: | 24 Aug | |||
| Payment: | 6 Oct |
