Devro Full-Year Profit Doubles on Growth in Meat Consumption
Devro Plc, Britain’s biggest maker of collagen sausage casings, said 2010 profit doubled as more meat was consumed in Latin America, East Europe and Asia and the more manufacturers switched from gut-based skins to collagen in all markets.
Net income climbed to 42.2 million pounds ($68.5 million), or 25.3 pence a share, compared with 20.2 million pounds, or 12.2 pence a share, a year ago, the Chryston, U.K.-based company said in a statement today. Revenue rose 7.5 percent to 237 million pounds.
China, the world’s most populous nation, is consuming more meat because of rising income among the middle-classes.
Devro announced today that one of their “most experienced directors” is moving to Hong Kong to exploit opportunities in China and south-east Asia.
Devro expects total sales volumes to grow 4 percent a year in line with the growth in demand for collagen casings, Peter Williams, the finance director, said on the call. The sausage casings maker plans to make a capital investment of 45 million pounds this year, which will increase production capacity by 8 percent in 2012 and 2013.
The extra investment will not require extra funds from shareholders, Devro said.
Adverse weather in December caused difficulties at Devro’s plants in the U.K., the U.S. and Australia and cut operating profit by about 600,000 pounds because of lower sales, higher costs and lost production.
Devro shares rose to their highest in almost three months, adding 4.7 percent to 243 pence a share in London trading today. The stock rose 3 percent to 239 pence at 8:55 a.m., giving the company a market value of 391 million pounds.
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