Juicy profit margins at Devro as world demand for meat heats up

SAUSAGE-skin manufacturer Devro reported bumper results yesterday as it said an ever-richer world population is opting to eat more meat.

Devro’s profit before tax and exceptional items grew 44 per cent in 2010 to £36.3m, up from £25.1m in 2009, while revenue grew 7.5 per cent to £237m. Its success was driven by an 11 per cent jump in sales of its edible collagen products, used in food manufacturing.

Profit margins also improved to 16.1 per cent in the year from 12.4 per cent in 2009, as it raised its prices.

Devro reduced its China sales because it could sell them at a higher price elsewhere – but it is moving one of its directors to Hong Kong to formalise a strategy for south east Asia.

“Demand for collagen casings is growing rapidly in China, and we are looking carefully at strategic ways to approach that market,” it said.