28 April 2022
Devro plc
AGM Trading Update
Devro plc (“Devro” or the “Company”), one of the world's leading manufacturers of collagen products for the food industry, issues the following trading update for the period 1 January 2022 to the current date, ahead of its Annual General Meeting today .
Current trading
The Group has delivered high single digit constant currency revenue growth in Q1, compared to the prior year, driven by a combination of volume, price and mix as we continue to deliver against our growth strategy. Revenue growth was good in both emerging and mature markets supported by positive underlying demand with North America and Continental Europe regions producing the strongest volume growth in the quarter. The Group is experiencing further inflationary headwinds and in response continues to achieve targeted price increases and to maintain tight cost management.
As a reminder, and as expected, in the first half of 2022 the £3.1m hedging gain in the first half of 2021 will not repeat, resulting in a material foreign exchange headwind. Full year profits will therefore be more second half weighted than is usual.
Financial position
As expected, net debt at the end of March has risen to circa £100 million. We continue to expect strong cash generation for the full year with further progress on reducing net debt compared to full year 2021 (£88.6m).
Outlook
The Group has started the year well and, despite ongoing macro-economic headwinds including inflationary pressures, we expect to continue to make good progress in 2022.
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