Sausage skin maker Devro today reported a rise in sales to £149.0m (US$284.69m)  in the year ended 31 December 2004, compared with £146.1m in 2003.

Pre-tax profit rose to £18.6m from £18.0m in 2003.

“Devro has achieved another year of significant growth in the market, capitalising on the fundamental strengths of our business,” said chairman Pat Barrett. “We continue to see solid growth opportunities for Devro. We envisage this growth to be largely organic, resulting from further market expansion, particularly in Asia and Eastern Europe, and from additional products which extend our range. Following the strong end to trading in 2004, 2005 has started positively and the Board is looking at the future prospects for the business with confidence.”

“Volume gains were delivered through a mix of increased conversion from gut casings to collagen, gains in market share and growth in the underlying sausage market,” he said.

Disruptions were caused to Devro’s manufacturing operations in the UK and US caused by variations in collagen arising from various regulatory issues surrounding the supply of casings using US-derived collagen, he said. “These issues resulted from the single case of BSE reported in the US in late 2003 and the consequent disruptions had an adverse impact on profit of around £0.6m. The temporary restrictions on collagen supply, coupled with increased demand and adverse foreign exchange effects, led to a rise in collagen raw material prices for certain parts of the group’s operations, with an adverse profit impact of £1.0m.

“Foreign exchange movements, due mainly to the weak US dollar and the relative strength of sterling, had a negative impact of over £1m on profits for the year,” he said.