Last year, the manufacturing plant Devro (DVO) opened in China turned operational. Its collagen-based products were previously manufactured in Scotland, before shipping to Asia to be sold. Chief executive Rutger Helbing said products are now made and sold in China and shipped to surrounding countries. During the first half, this had a negative impact on volumes – down 15 per cent in China – while Scottish-made stock was removed from the market and replaced with domestically-manufactured products. But making goods locally, with improved quality to suit regional tastes, contributed to a 19 per cent improvement in average selling prices in China.
Ignore Asia, and volumes increased by 3 per cent at group level. This was mainly driven by improvements in Europe – the group’s largest market, representing 45 per cent of total sales. But this growth could slow as the group tackles tough comparatives and a challenging Russian market. Fortunately, the 'Devro 100' cost savings programme is on track. Mr Helbing said it saved £1.5m in the first half, with a total of £4.5m expected by the year-end.
Analysts at Investec expect pre-tax profits of £34m during 2018, giving EPS of 15.4p, compared with £29.5m and 13.7p in 2017.
| DEVRO (DVO) | ||||
| ORD PRICE: | 201p | MARKET VALUE: | £335m | |
| TOUCH: | 200-202p | 12-MONTH HIGH: | 247p | LOW: 185p |
| DIVIDEND YIELD: | 4.4% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 86p | NET DEBT: | 103% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 125 | 10.0 | 5.5 | 2.7 |
| 2018 | 120 | 10.9 | 4.7 | 2.7 |
| % change | -4 | +9 | -15 | - |
| Ex-div: | 23 Aug | |||
| Payment: | 5 Oct |
