finance

Sausage skin manufacturer warns on foreign exchange headwinds



Devro has reported that the impact of strengthening foreign exchange headwinds is likely to have a £3m adverse impact on full year operating profit.

The Moodiesburn-based manufacturer of collagen products for the food industry gave a trading update for 30 June to 31 October, revealing that the group is still on track for covenant net debt to earnings ratio of around 1.5x at year-end.

“Trading in the period has been encouraging, with constant currency revenue growth above that seen in the first half of 2021,” read the statement.

Continued growth in North America was backed by “improved sequential trends” in Continental Europe, the UK and Ireland.

Emerging market growth was particularly strong in Latin America and Middle East and Africa.

“While the Group is experiencing inflationary pressure, this is being mitigated through pricing action and tight cost management,” the trading update noted.

The board’s expectations for the full year remain unchanged.

“As we look forward to 2022 we are positive about the outlook but remain alert to global supply chain challenges, inflation and further foreign exchange headwinds,” Devro added.

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