Devro reports strong profits
Sausage-casing company Devro has shown a strong performance in the six months ending 30 June, with pre-tax profit up 19% to £19.6m, its interim report reveals.
Sales revenue for the first half of 2011 rose 2.4% to £107.1m, with operating profit from continuing operations up 11.6% to £19.5m, compared to £17.5m in 2010.
The company reported strong sales in South East Asia, Eastern Europe and Russia, as well as a sizeable shift into higher margin sales. The premium range also gained momentum in Europe and Japan while the firm continued to develop markets in China and the Far East.
It announced investments of £45m over the next few years to increase capacity and enhance productivity. £15.1m has already been invested in existing sites in the first half of 2011
Chairman Steve Hannam said: “The global market for collagen casings continues to grow, driven primarily by economic expansion and increased meat consumption in emerging markets. High sheep gut prices and limited availability are also providing increasing opportunities in developed markets for substitution by collagen casing.
“The continuing business remains on track to deliver the board’s expectations for the full year.”
The company also confirmed the sale of its German distribution subsidiary, Devro GmbH to Finish firm ViskoTeepak Holding AB Ltd for 1.9m Euros, allowing it to concentrate on strengthening sales and marketing of its core collagen casing business.