24 Nov 2020 07:00
24 November 2020
Devro plc
Trading Update
Devro plc ("Devro" or the "Group"), one of the world's leading manufacturers of collagen products for the food industry, issues the following trading update for the period 1 July to 31 October 2020 (the "period").
Trading Update and Outlook
Trading in the period remained robust, despite the impact of COVID-19 on the food service channel, with collagen volumes growing and Group operating margins improving. As a result, our expectations for the full year remain unchanged.
Emerging markets continued to grow well in the period. Most mature markets grew, but this was more than offset by declines in Continental Europe and UK & Ireland mainly reflecting a weaker food service channel. For the full year we still expect good growth in emerging markets to offset a decline in our mature markets leading to broadly flat collagen volumes, with an estimated 2% net negative impact from COVID-19.
The Bellshill site closure and transfer of production lines to the Czech site remain on track.
On the 13 November 2020 Group net debt was £123.8m. In line with our normal seasonal cash generation we expect net debt to improve by year-end, to a similar level as of 30 June 2020, with the covenant net debt / underlying EBITDA ratio less than 2x. We expect strong cash generation in 2021 to drive leverage down further.
The interim dividend, announced in July, of 2.7p will be paid to shareholders on 15 January 2021. As previously announced the postponed 2019 final dividend of 6.3p, was paid in the form of a second interim dividend in October 2020.
Rutger Helbing, Chief Executive, said:
"We continued to make good underlying progress in the period. While we expect market conditions to remain challenging for the rest of the year we remain on track to deliver against our expectations. This is testament to the contribution of our people and I would again like to put on the record my gratitude for all their hard work. All sites remain open and we continue to provide good service to our customers and fulfil our role in the food supply chain."
ENDS
Contacts:
Devro plc
Rutger Helbing | Chief Executive Officer | Tel: 020 3865 7637 |
Jackie Callaway | Chief Financial Officer | Tel: 020 3865 7637 |
FTI Consulting
Richard Mountain Nick Hasell | Tel: 020 3727 1340 |