In advance of the start of its close period, Devro plc gives the following trading update.
Trading during the first half of the year has been largely as indicated at the Annual General Meeting.
During the first half, market performance was mixed with mature markets being slower and developing markets more buoyant. In manufacturing, while the introduction of the new product range into the Scottish operation continues to present a number of technical challenges, solid progress is being made and the second half is expected to show an improvement.
In the United States, first half factory performance has shown an improvement over prior year. However, the impact of increases in the cost of the principal raw material, collagen, is expected to amount to around £0.5 million during the second half. As you would expect, a number of initiatives are targeted at minimising this cost increase.
As a result of these factors, first half profits will be lower than the prior year before exceptional items with the financial performance in the second half expected to strengthen. Initiatives previously outlined in terms of additional capacity, improved products and improving manufacturing will assist in this improvement.
Peter Page, the new Chief Executive who joined the group on 1 June 2007 commented "I am very positive about the longer term prospects for the group".
Interim results are scheduled for 6 September 2007.