Devro (LON:DVO), the company that makes collagen products for the food industry, saw its shares rise by nearly 7% to 219.75p this morning on news that it had posted a 56% increase in pre-tax profits to £17.1m during the six months to June 30, 2010. Devro, whose casings find their way into sausages, salami, hams and cooked meats, said it had enjoyed strong trading, with sales up 11% to 116.1m, and was expecting the performance to continue in the second half of the year. As a result, it increased its interim dividend increased by 40% to 2.0p per share.

Looking at the detail, Devro reported strong growth across the majority of its geographic markets and had seen a favourable shift to higher-margin sales. Elsewhere, the company said the installation of new high speed lines at its Czech and Australian facilities had been completed on time. Likewise, the company achieved better savings than forecast from its 2009 investment in the Czech facility and also saw improved manufacturing efficiencies in all of its other plants.

Steve Hannam, Devro’s chairman, said: “We are very encouraged by the improvement in Devro's performance in the first half of this year. The Board expects the good performance to continue for the rest of the year, supported by the additional production capacity recently commissioned in our Czech and Australian facilities. Looking further forward, our markets are continuing to provide growth opportunities. The group is well placed to take advantage of new product development and improvements in operational efficiency.”

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