Devro PLC (LSE:DVO), which makes collagen products for the food industry, said it has seen an acceleration in revenue growth in the second half of 2021.
The group did not give revenue numbers and was careful to stress that it was referring to “constant currency” revenues, and noted that it is seeing the impact of strengthening foreign exchange headwinds with the adverse year-on-year impact expected to be roughly £3mln on full-year operating profit.
Mature markets have been strong in the second half of the year with continued growth in North America and improved sequential trends in Continental Europe and UK & Ireland, Devro said.
Emerging market growth was particularly strong in Latin America and the Middle East and Africa, the group noted.
On the downside, the group is experiencing inflationary pressure but management is mitigating this by passing on price increases to customers and through tight cost management.
Cash generation was described as “strong” and management said it is on track to meet its banking covenants with year-end net debt expected to be around 1.5 times annual underlying earnings.
“The board's expectations for the full year 2021 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,” the company said.
Shares in Devro were unchanged.