StockMarketWire.com - Collagen product maker Devro said sales grew 1% during the third quarter as growth in North America was offset Continental Europe and weaker than expected sales in Japan.

The company also said it would close its Bellshill site in Scotland and write-down the China and US plants amid a strategic review of its global manufacturing footprint.

For the period from 1 July to 30 September 2019, sales volume grew 1% in collagen casings, compared with a 1% decline in the first half of the year.

The company said its cost saving initiatives were progressing well and it was confident of achieving our guidance of £7m in fiscal 2019.

Full-year volume was expected to grow at about 1%.

After carrying out a strategic review of its global manufacturing footprint, the company proposed to close its Bellshill site in Scotland and increase the portfolio of products manufactured in its Moodiesburn site in Lanarkshire.

The closing of the Bellshill site during 2020 would lead to a loss of about 90 employees and exceptional cost of £15m would be incurred, with £11m expected to be recorded in 2019 and £4m in 2020 .

This would result in annualised cost savings of £5m to be fully realised in 2021, the company said.

The company also said it expected to record non-cash exceptional impairment charges in 2019, primarily relating to partial write-downs of the China and US plants.

'Our expectations for the full year remain broadly unchanged as growth in underlying operating profit through higher volumes, delivery of costs savings and positive FX will be offset by adverse country/product mix, lower revenues from other products and energy and wage inflation which was highlighted in previous announcements,' the company said. At 8:54am: [LON:DVO] Devro PLC share price was -1.4p at 167.4p



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