Chief executive Rutger Helbing said the new financial year had “started positively” and the group was “well positioned for the future”.
Despite a dip in annual revenues to £247.6 million from £250m a year earlier, underlying operating profit was up 4 per cent to £40.8m.
The group revenue figure was marginally lower due to “adverse mix and other products declining”, Devro noted.
Volume of edible collagen casings increased 1 per cent, underpinned by strong overseas sales. Emerging markets were up 13 per cent: driven by Latin America, Russia and South East Asia.
However, “mature markets” were down 5 per cent. Growth of 9 per cent in North America was offset by a pandemic-related decline in the food services sector and “distributor destocking” in Europe. The negative impact from Covid-19 was estimated at 2 per cent.
A proposed final dividend of 6.3p was declared bringing the total payout to 9p per share – flat on the prior year.
During the past year, the group closed its Bellshill plant, delivering “substantial” annualised cost savings.
It said a structured process to identify and convert sales had left to a “strong pipeline of opportunities” for 2021.
Helbing said: “I am proud that in a year where we had to deal with the impact of Covid-19 we continued to make good progress with both our trading performance and strategic priorities.
“This progress in such challenging circumstances highlights the considerable efforts of the whole Devro team and I would like to put on record my gratitude for this; it’s been a huge effort.
“The progress we made in all areas of our 3Cs strategy in 2020 provides a strong foundation for further strategic and trading performance improvements in 2021. We also expect another year of good free cash generation.
“Encouragingly, the year has started positively, although caution remains as many of the Covid-19 related challenges experienced in 2020 are still evident.
“Despite this we expect to make further progress in 2021 driven by our sales pipeline actions, solid underlying demand and the ongoing benefits of operational improvements. Devro is well positioned for the future.”
Analysts at brokerage firm Shore Capital said: “We see scope for Devro to deliver sustained growth and further ratings expansion over time, supported by a highly attractive income stream.
“Accordingly, in difficult times, we believe that the group has delivered a robust performance but, more importantly, completed much heavy lifting. As such, we reiterate our ‘buy’ recommendation on Devro’s stock.”
The results follow a brief stock market update in January, when the firm told investors that trading in the final months of 2020 was slightly ahead of management expectations, driven by higher volumes and margins. The group said it had delivered strong cash generation in the final quarter.
Its 2020 results showed that underlying basic earnings per share were up 9 per cent to 16.5p. Capital investments in 2020 increased to £16.2m compared to £13.9m in 2019.