A Scottish sausage skin and casing company has seen a 15% sales growth from Asian and South American markets, while more "mature" markets were broadly flat.
Devro, headquartered in Moodiesburn, South Lanarkshire, said that its volumes had increased by 4.6% in the opening months of this year compared to the previous year.
Japan and North America helped deliver strong growth for the company, offsetting the lower demand in the UK and Europe, which had benefited from elevated retail volumes in March 2020 as the pandemic took hold.
Devro reported revenue down by 1% last year from £250m to £247.6m thanks to its pricing investments in long term contracts and lower product sales.
Underlying profit grew by 4% year-on-year to £40.8m, mainly due to increased supply chain efficiency.
Restructuring costs from the 2019 closure of its Bellshill site cost the company £4m, while £600,000 was used to implement the final stage of its new global operating model.
Devro is expecting the growth in international markets to continue, but is mindful of the pandemic and “headwinds” from foreign exchange rates.
The company noted its strong cash flows during the first quarter, ending it with comparable levels of leverage to the 2020 year-end, including the dividend payment made in January.
It repaid the $25 million private placement due on 19 April 2021 using a combination of available cash resources and revolving credit facility drawings. As a result, the group maintained significant liquidity, but has a lower average cost of borrowing.
Its remaining debt facilities consist of a committed $105m revolving credit facility, which expires in 2023, and $75m of private placements expiring April 2024 ($50m) - and 2026 ($25m).
Rutger Helbing, chief executive at Devro, commented: “The progress we made in 2020 provides a strong foundation for further strategic and trading performance improvements in 2021 - we also expect another year of good free cash generation.
“We expect to make further progress in 2021 driven by our sales pipeline actions, solid underlying demand and the ongoing benefits of operational improvements.”
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