Devro PLC to deliver underlying profits at top end of consensus
The producer of sausage casings saw better than expected trading in the final months of 2020
PLC () said it expects to deliver full-year underlying operating profits around the upper end of current analyst expectations.
Consensus is currently placing the figure between £38mln and £40.5mln, which would compare to 2019’s £39mln.
The producer of sausage casings said trading in the final months of 2020 was slightly ahead of management’s expectations, driven by higher volumes and margins.
It also delivered “strong” cash generation, leading to a year-end net debt of £110mln, compared to £124mln in December 2019.
The firm has been challenged by the impact of the COVID-19 pandemic on the foodservice channel and previously said growth in emerging markets would offset a decline in its mature ones.
Analysts at Peel Hunt increased their 2020 profit before tax forecast by 8% to £35mln and said it is “encouraging” that business is stable given the current restrictions.
Shares rose 2% to 158p early on Monday.
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