Revenues up 7.7% to £115.4 million on strong overseas sales despite higher input costs
Sausage skin maker Devro has reported strong first-half results despite further rises in input costs.
The Moodiesburn-based company has reported a 7.7 per cent rise in revenues to £115.4 million for the six months to June 30.
Overall sales rose on the back of Devro's 'Select' higher margin collagen casing range in the Asia/Pacific region, particularly in Japan, where the demand has been strong.
Sales to Germany and Eastern European countries also rose in the first-half.
Edibile collagen sales in in the Americas are also reported to have “increased considerably”, particularly in Latin American markets.
But sales volumes in the UK and Ireland fell in the first half as a “small number of product lines” moved back to hog gut casing.
Devro said strong overseas demand saw first-half operating profits rise by 6.5 per cent to £20.7 million and pre-tax profits rose by 5.7 per cent to £20.2 million, though £1.5 million of those gains came from “manufacturing efficiencies”.
However, on a year-on year basis, per-tax profits flat lined, though compared with a 19 per cent rise in first-half profits reported at the same point last year.
Net debt also rose more than 30 per cent in the first half to £31.4 million, though Devro said this was down to a wider investment programme which has seem improvements to the production process offset higher input costs.
Last year Devro invested £15 million upgrading the production line at its Bellshill factory.
In a market announcement today, Devro said its board has approved a further £35 million of investment for the 2012 year to increase capacity, with £10.2 million having already been spent in the first half of the year.
Devro is adding additional capacity at its plant in the Czech Republic, which it said should begin to reap rewards in late 2013.
Chairman Steve Hannam said: ““Sales have increased across a wide range of markets and the good momentum from the second half of 2011 has continued into 2012.
“The outlook for the remainder of the year is for continued volume growth particularly of sales of
differentiated products such as Select, supported by further manufacturing improvements arising from our capital programme.
“We remain on track to meet the Board’s expectations for the full year.”