(Alliance News) - Devro PLC on Thursday reported growth for the first quarter of 2020 but said it will delay payment of its 2019 final dividend amongst other measures to conserve cash amid the Covid-19 pandemic.
The sausage casings maker said that for the first quarter, edible collagen volumes increased by 2% year-on-year driven by higher short-term demand and its "continued execution of growth initiatives".
Strong performance in Latin America, Russia, East and South East Asia pushed growth in the emerging markets up by 13% while mature markets declined by 3% as a result of ongoing distributor destocking in continental EU & West Europe as well as weaker demand in UK and Ireland during January and February.
Devro added that disruptions to supply has resulted in a rise in the costs of some raw materials but noted that it is currently working to mitigate the extent to which the inflation will hurt its savings. Cash saving measures being implemented include cutting all discretionary capital and operating expenditure.
The company highlighted that it is currently not making use of any UK government schemes designed to support businesses through the period of Covid-19-related disruption.
Devro has withdrawn its recommendation to pay a 2019 final dividend of 6.3 pence per share, therefore saving around GBP10.5 million. However, it said it intends to pay an additional interim dividend of the same amount in the second half of 2020 dependent on conditions nearer the time.
Looking ahead, it stated: "Despite our good volume growth performance in the first quarter, we do not envisage any change to prior volume guidance for 2020. As such, and absent any negative Covid-19 impact, the board's expectation for good progress in 2020 is unchanged."
Devro shares were trading 0.8% higher at 146.00 pence each on Thursday afternoon in London.
By Ife Taiwo; ifetaiwo@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.