Sausage skin manufacturer Devro saw its net profit more than double in 2010 as the company saw operating margin and sales increase over the year.

The UK-based company today (21 February) recorded GBP42.2m (US$68.4m) net profit for the year, against GBP20.2m in 2009. Excluding exceptional items, profit was up 39.4% against 2009 to GBP28.5m.

Sales rose 7.5% to GBP237m, while operating margin hit 16.1% against 12.4% in the previous year. The company attributed the improvement in margin to a shift in sales to higher margin products and customers, as well as improvements in manufacturing.

Devro said that the demand for collagen casings is growing rapidly in China and the company is looking “carefully at strategic ways to approach that market”. The company, it said, had relocated one of its “most experienced directors” to Hong Kong to “dedicate time and exploit opportunities” in China and south-east Asia.

The company said that it has “good connections” with some of the major players in China and is set to complete the establishment of a subsidiary in Beijing, which will allow it to conduct direct commercial transactions in the country.

Commenting on the group’s outlook for 2011, CEO Peter Page said: “We expect to see sales volumes increase further as the capacity from recent investments comes on stream and new products displace gut. We will continue to seek margin improvements as the benefits of manufacturing efficiencies come through, and we are planning significant new investments to provide capacity for further growth in 2012 and 2013. I am confident that our management teams around the world will maintain the excellent progress of the past three years.”

Shares in the company were up 3.5% today following the announcement to 240p a share at 9:54 GMT.