SAUSAGE skin-maker Devro enjoyed a strong finish to last year in spite of the uncertainty caused for businesses by the fresh spike in coronavirus infections.
The Lanarkshire-based firm said trading in the final months of 2020 was slightly ahead of management’s expectations, driven by higher volumes and margins.
The success put the company on track to achieve annual profits around the upper end of current analysts’ expectations.
The company compiled consensus forecast range for operating profit is £38 million to £40.5m.
The update suggests Devro held its own last year amid the challenging conditions caused by the pandemic.
Devro made £39m operating profit in 2019.
In its first half results announcement in July, Devro said Covid-19 related issues left volumes down around 1.5 per cent in the six months to June 30.
However, the company felt able to resume dividend payments which it had suspended in April amid uncertainty about the potential impact of the coronavirus crisis. The company said profitability had been supported by cost-saving moves initiated before the pandemic.
In October 2019 Devro decided to close its factory in Bellshill, in a move which led to 90 redundancies. Devro decided it had “excess infrastructure” following a review of its manufacturing operations. The move was expected to allow the firm to make annual cost savings of £5m.
READ MORE: Devro hails strong performance by Lanarkshire manufacturing plants
Devro shares closed up 5p at 160p.
Devro’s house broker Numis said of yeserday’s trading update: “We think that this is an excellent outcome given the market and operational challenges presented by the pandemic.”
In July Devro said it had benefitted from increased sales in retail markets but food service business had been hit by lockdowns. Some US customers had been impacted by Covid-19 issues in parts of the meat supply chain.
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