UK sausage-skin maker Devrp has warned that its full-year operating profit will likely miss forecasts.

The company blamed higher input costs and the negative impact of currency exchange, due to a weak Czech crown.

Nevertheless, the company emphasised that volumes have continued to grow across a number of key markets, including Japan, Europe and the Americas.

The company also unveiled plans to invest GBP35m in increasing capacity and productivity initiatives in 2013 and 2014. 

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Devro plc Interim Management Statement

Devro plc, one of the world's leading manufacturers of collagen products for the food industry, today provides an Interim Management Statement in respect of the period from 1 July 2012 to date.

Sales volumes have continued to grow across a wide range of markets, notably in Japan, Europe and the Americas, with sales of the premium Select range continuing the momentum of the first half. Overall market demand remains strong both in established and emerging markets.

In common with many input costs to the food industry, raw material prices have continued to rise and this trend is expected into next year.

As a result of the combination of adverse currency movements, continuing increases in raw material costs and extended plant commissioning periods, overall full year operating profits are expected to be slightly below our original expectations but ahead of last year.

The 2012 capital programme involves the investment of approximately £35 million to increase capacity and enhance productivity in 2013 and 2014.  New lines are now running successfully in Scotland, Australia, USA and Czech Republic. Further capacity is on track for completion in 2013.

With new capacity in production and a full order book, the Group is looking at a strong end to the year and the Board remains confident in the continuing growth of the business.

Peter Page CEO commented

"Our business is well positioned for the future, with good demand from a global customer base, an experienced management team, and a proven product portfolio."

Original source: Devro