Devro, a manufacturer of collagen products for the food industry, is on track to meet its full year targets following continued strong sales growth in Japan, South East Asia, Eastern Europe and Latin America.
Revenue for the half-year increased 7.7% to £115.4m (2011: £107.1m), with operating profit of £20.7m (2011: £19.5m), despite higher input costs.
Profit before tax, excluding net finance expense/income on pension, was ��20.2m, 5.7% higher than £19.1m the same half the previous year, with earnings per share at 9.9p (2011: 9.2p). Reported profit before tax was unchanged at £19.6m.
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Steve Hannam, Chairman of Devro, said: "Sales have increased across a wide range of markets and the good momentum from the second half of 2011 has continued into 2012.
"Sales of our premium Select range, which is specifically designed to replicate the characteristics of high quality sheep gut in developed markets, continue to grow strongly in Japan and Europe, and we are now achieving our 2012 target for Select of 8% of total sales.
"The global market for collagen casings continues to expand due to economic growth and increased meat consumption in emerging markets. High sheep gut prices and limited availability also provide good opportunities in developed markets for substitution by collagen casing.
"The outlook for the remainder of the year is for continued volume growth particularly of sales of differentiated products such as Select, supported by further manufacturing improvements arising from our capital programme."
The interim dividend was increased from 2.5p to 2.65p.
As expected, following the firm's investment programme, net debt increased to £31.4m (2011: £24.0m).
Regionally, edible collagen volumes in continental Europe continue to increase, particularly in Eastern Europe, Scandinavia and Germany with sales of Select making a significant contribution to this increase. The Eurozone difficulties have had limited impact on the levels of demand and sales.
UK and Ireland volumes, as expected, were down as a small number of product lines moved back to hog gut casing.
Edible collagen volumes in the Americas increased considerably with solid growth in Latin American markets. Strong manufacturing performance compared to the prior year assisted in the improved availability of product to satisfy demand.
Total volumes were up in Asia/Pacific with Japan showing significant growth reflecting the demand for Select. South East Asia and Korea also continue to grow.
The share price fell 0.17% to 300.10p by 09:38.
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