Devro shares up on sale of German distribution business

DEVRO, the sausage-casing maker, has sold a small German distribution arm to focus on its core operations.

Shares in the Moodiesburn-based manufacturer closed up 9p at 262p after the company revealed a 19 per cent rise in half-year pre-tax profits to 19.6 million on its continuing operations.

The business also became more profitable, as the firm continued its shift to higher-margin sales. Revenue grew in Europe and Japan, despite a dip following the tsunami, while volumes were down slightly in the UK and Ireland due to promotional activity which boosted sales in the first half.

The firm sold its German distribution arm to Finnish group ViskoTeepak for €1.9m (1m) although the new owner will temporarily sell Devro casings on an agency basis.

Steve Hannam, chairman, said: "The continuing business remains on track to deliver the board's expectations for the full year." Net debt in the half-year rose to 24m from 17.1m, but the firm is in an "advanced stage of negotiations" with a trio of lenders to extend its 51m debt facility. The interim dividend is raised by 0.5p to 2.5p.