SHARES in Devro were up by more than four per cent last night after the Glasgow-based sausage skin manufacturer said it returned to volume growth in the early part of the year.

The company, which saw its profits drop by more than half amid moves to drive efficiencies across its global manufacturing base in 2016, said volumes were up compared with the start of last year, in line with expectations. It highlighted that Devro 100, its plan to drive revenue, deliver manufacturing efficiency and introduce new products, was on course to achieve cost savings this year.

House broker Investec suggested an improving performance in China, where the company aims to have a new factory on stream by the end of the year, is “one factor assisting” Devro’s return to volume growth this year.

The broker said its forecast for the year had not changed, noting that it anticipates profits to be “flat” this year before resuming growth in 2018 and 2019. It is guiding the market on pre-tax profits of £31.5 million, and earnings before interest and tax of £38.1m, for 2017, and has left its target prince unchanged at 236p.

On Devro 100, the broker said it expects the programme to deliver savings of around £3.5m this year, rising to between £13m and £16m by 2019.

In a statement issued ahead of its annual meeting yesterday, where all resolutions were carried, Devro said: “Trading for the period was in line with the Board’s expectations, with total sales volumes ahead of the equivalent period last year. The Devro 100 programme continues to progress well, with actions on track to deliver the anticipated cost savings for the year.”

Shares closed up 8.25p at 197.5p.