Devro shares tumble 17% after warning over profits

Devro said its profits for 2017 will fall short of previous hopes, sending its shares tumbling. Picture: Jeff Holmes
Devro said its profits for 2017 will fall short of previous hopes, sending its shares tumbling. Picture: Jeff Holmes
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Shares in Scottish sausage skin and food casings maker Devro crashed 17 per cent yesterday on a profit warning for next year.

The Moodiesburn-based group, which makes collagen products for the food industry, said: “Based on current trends, sales volumes in 2017 are now expected to be approximately 10 per cent lower than previously anticipated, which will result in an under-utilisation of available capacity.”

READ MORE: Devro warns of higher costs linked to US shake-up

Devro said this under-utilisation would also hit profit margins, and “consequently the board now expects underlying operating profit for 2017 to be lower than previous expectations”. The shares closed down 39.25p at 186.75p.

Devro warned last August that costs related to its US manufacturing operation would be higher than previously expected. The company said yesterday that actions were now being taken “to rebalance the use of capacity across our global manufacturing base”.

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