Devro back Scottish operations as profits soar

Sausage-skin maker Devro unveiled appetising results. Picture: AFP/Getty Images
Sausage-skin maker Devro unveiled appetising results. Picture: AFP/Getty Images
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SAUSAGE skin maker Devro will continue to invest in its Scottish operations, chief executive Peter Page said yesterday after unveiling an appetising set of half-year numbers.

The Moodiesburn-based firm has been focusing much of its investment on new plants in China and the US, while restructuring its operations both in Scotland and Australia. Those changes have seen it cut some 130 roles north of the Border.

However, Page stressed that the shake-up had been necessary to adapt to global markets and the introduction of new technology.

“We continue to invest in Scotland and there will be capital investment going in this year,” he said. “We are producing more in volume terms in Scotland than when I joined the company. Technology and efficiencies move on.”

Page, who took the helm in June 2007, said the final phase of restructuring of operations in Scotland and Australia had completed during the first quarter and the firm was now seeing the cost savings coming through.

He described the first six months of the year as “pretty solid” financially, but added there was “still a lot to do in the second half”.

Profit before tax surged to £9.6 million, compared with £1.6m a year earlier as one-off costs fell to £4m, down from £10.8m. At the operating level, profit before exceptional items lifted to £15.6m from £14.1m.

The group said that sales volumes and revenue, in constant currency terms, grew by 5 per cent, though that pace is unlikely to be matched in the second half of the year.

It is paying out an interim dividend of 2.7p, unchanged from the year before.

Page said: “There is a lot of spend going on and we felt it was sensible to hold it [the divi] where it is, push ahead with the transformations and review it at the end of the second half.”

Investec Securities stuck with its “buy” recommendation on the stock. Analyst Nicola Mallard said: “A good 1H result for Devro which reflects a better volume performance with demand geographically broadly spread.”