Devro's revenue bolstered by shifting currencies
In its results for the year ended 31 December 2016, the company's revenue increased 4.7% year-on-year to £241.1 million (m). However this was flattered by exchange rate movements in the second half of the year, with Devro's revenues in constant currency declining 6.9%.
The business' volume sales dropped by 6.6% over the period, but its operating profit for the year rose by £4.8m.
Other operational highlights included an investment of £22.7m for its transformation programme.
Peter Page, chief executive of Devro, said: "While volumes declined by 6.6% year-on-year, underlying operating profit increased, due to lower input prices and exchange rate benefits. The decline in sales volumes in 2016 was due to a series of region-specific factors. We have taken action to ensure a return to growth in 2017 and beyond.
"Following the significant capital investments we have made in recent years, we are now focused on using our high-technology assets to supply a growing global market. Overall demand remains strong and we continue to see many attractive opportunities to grow the business."
Looking ahead to the next 12 months, Page said the business would be focusing on regaining market share through the launch of new products and its Devro 100 programme.
"In 2017, we will focus on increasing revenue to regain market share, achieving cost savings across our global operations and commencing the launch of new, differentiated products, as part of the Devro 100 programme.
"The further exceptional costs of this programme are expected to be between £10m-£12m over the next two years, plus capital investments of between £7m-£8m, with expected benefits of between £13m-£16m per annum by 2019. Over this period there will also be a focus on reducing net debt levels. Combined with our upgraded global manufacturing asset base, we are confident this will deliver long-term growth."
