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Sausage skin maker Devro has upped its dividend for the first time since 2018 and signalled a strong start to the current year despite increasing cost pressures.
The Lanarkshire-based firm posted a pre-tax profit of £36.9 million for the year to the end of December, up from £34m in 2020, on revenues of £252.4m. Sales volumes in emerging markets were 7.1 per cent higher, driven by orders from Latin America and Southeast Asia, while robust demand from snack manufacturers in North America led to a 3.7% increase in mature markets.
The group said it has successfully implemented price hikes to offset higher energy and raw material costs, with chief executive Rutger Helbing adding that Devro expects to make “good progress” in the current year.
“Our improved performance was achieved despite ongoing challenging market conditions, including inflationary headwinds,” Mr Helbing said. “We are also pleased with our free cash flow performance which provides us with increasing optionality to invest in new products, to increase manufacturing capacity and to grow the dividend.”
The company has proposed a final dividend of 6.5p for a total pay-out of 9.3p for the year, up from 9p in 2020. Shares in Devro closed yesterday’s trading 2p lower at 202p.