(Alliance News) - Sausage casings maker Devro PLC on Wednesday posted an annual loss due in part to impairments in the US and China.
Devro's pretax loss in 2019 was GBP21.8 million, after a GBP17.5 million pretax profit in the year prior. On an underlying basis, excluding exceptional items, pretax profit rose 3.1% to GBP33.1 million.
Devro's loss was "largely as a result of the review of the global manufacturing footprint which led to the decision to close Bellshill, and the related non-cash accounting impairment of the group's manufacturing assets in US and China", the firm said.
The company's Bellshill plant is located in Lanarkshire, Scotland. Devro's headquarters re in Chryston, also in Lanarkshire.
Revenue in the year fell 1.3% on the year before to GBP250.0 million.
Volumes in the year were flat, Devro said, but growth in emerging markets was "strong" at 8%. This was offset by a 3% volume decline in mature markets due to weak demand.
Devro is paying a final dividend of 6.3 pence per share, taking the year's total to 9.0p, meaning no change on the year before.
"We continued to focus on our growth plans throughout the year, defending and building upon our strong market positions in mature markets and targeting to increase our share in emerging markets. Once again, and in line with our strategy, we increased our sales in emerging markets as a percentage of group volumes," said Chief Executive Rutger Helbing.
"The 2019 progress in executing our 3Cs strategy further underpinned the Devro difference, with our focus on collagen, customer intimacy, technical expertise and as a globally integrated player."
"We are confident our growth plans, combined with a continued focus on cost savings and ability to provide the capacity required for growth utilising our current footprint, further support the strong cash generative nature of the business and our attractive margins," Helbing added.
Looking ahead, Devro sees "good" volume growth in emerging markets. It expects mature market volumes to growth year-on-year in 2020, with North America offsetting weak markets in the UK and Europe.
"In addition, cost savings are expected to more than offset inflationary cost pressures. Absent any material adverse impact of Covid-19, the board expects good progress in 2020," the company added.
Devro shares were 3.8% higher on Wednesday morning in London at a price of 152.60p each.
By George Collard; georgecollard@alliancenews.com
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