Devro reports solid sales growth

Sausage casings-manufacturer Devro has reported solid sales growth in the year ended 31 December 2011, allowing it to keep debt down despite high expenditure.

The company reported that revenue was £227.7 million in 2011, an increase of 6.6% on 2010. Performance in the second half of the year showed a significant improvement over the first half due to growth in sales to Russia and Eastern Europe, as well as success of the company’s new Select range of products in Japan and Europe. Revenue grew by 10.6% in H2 compared to 2.4% in H1.

Operating profit before exceptional items increased by 15.5% to £42.7 million and the company said that “strong cash flow” allowed net debt to be kept to £22.7 million, despite significant investment in capital expenditure during the year. Total expenditure was £43.4 million in 2011, with the majority spent on replacing old manufacturing lines in Scotland and replacing an older manufacturing building in the Czech Republic.

In the UK, strong supermarket discounting and promotion of certain segments led to a slight reduction in the share of sausages sold in collagen casings. However, the company said that improved UK pricing and the opportunity to export a greater proportion of UK production to meet demand in other markets allowed it to offset the reduced sales volumes.

Steve Hannam, Chairman said: “I am delighted to report that 2011 was a year of further growth in the business, improved financial performance and significant progress with our strategy.   

“The fundamental growth prospects for our global markets remain encouraging. With our evolving product range and strategic capital investment programme, we are well placed to take advantage of this opportunity. The strong performance in the second half of 2011 and the continuing strength of the balance sheet give us confidence for the future.”


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