Devro profits hurt by cost of new factories

 
Kasmira Jefford
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SAUSAGE skin-maker Devro said sales volumes have begun to bounce back after investments in new manufact­uring technology and the strength of the pound against other currencies hurt full-year profits.

The company, which makes collagen casings for all types of sausages, including dried salami, cumberlands and frankfurters, posted a 94 per cent fall in pre-tax profit to £2.2m for the year to 31 December while sales fell four per cent to £232.3m.

Actions taken to restructure its businesses in Scotland and Australia reduced profits by £6.6m and adverse foreign exchange movements by £4.3m, Devro said.

Over the last two years, it has also invested £95m of capital in building a new plant in the US as well as its first factory China – both of which are expected to begin production in 2016. This accounted for £24m of exceptional items last year.

Devro said trading had shown a steady recovery since the first quarter of last year, with key markets including China and Japan performing well. Sales volumes of edible collagen were up three per cent for the full-year while sales by value were two per cent ahead.