Devenish expects quick return to profitability after falling into red last year

Irish agtech company Devenish is expecting a quick return to profitability after falling into the red last year due to Brexit, the coronavirus pandemic, and a fire at its Belfast facility.

The company recorded a £5.3 million (€6 million) loss for the year to the end of May 2020, but forecast it would likely return to profit over the next 12 months.

Turnover at the company remained stable despite the difficulties encountered with revenues totalling £226 million, versus £229 million a year earlier.

Operating profit before exceptional expenses reached £1.37 million from £3 million in 2019, although costs relating to the fire at the Belfast plant meant an operating loss after exceptional expenses of £1.7 million was recorded.

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The company said the fire, which broke out at its distribution centre on Duncrue Street, had slowed growth, particularly in international markets. However, it said the coronavirus pandemic has pushed health and science further up customers’ agenda in the agriculture sector and beyond.

Headquartered in Belfast and with sites across Britain, the US, Turkey and Uganda, the animal nutrition company employs 750 people globally and trades in over 40 countries.

Innovation

The company, which is led by Richard Kennedy, the winner of the 2019 EY Entrepreneur of the Year award, received €118 million in investment in 2018 from the European Investment Bank (EIB), Ulster Bank and Danske Bank. It recently engaged Goodbody to raise further capital as it continues to expand internationally.

Mr Kennedy said there was strong interest from investors in backing the company.

“Despite navigating the challenges of the fire, we continue to have an unwavering focus on innovation and are reinvesting in the future of the industry. We are pleased to be making progress on our research and development programme, which is supported by the EIB,” said Mr Kennedy.

“It is reassuring to see uncertainty around Brexit lessen and the progress on Covid vaccines means that we expect to see a return to more normal trading relationships in our international markets during the coming year,” he added.

Mr Kennedy said Devenish is reorienting its business to exploit its portfolio of technologies in new and existing markets.

“We have demonstrated great resilience through this period and look forward to building on our progress further in the coming year,” he said.