DVO.L Share News (DVO)

Sausage skins maker Devro produced full-fat results for 2010 with operating margin improving sharply.Profit before tax and exceptional items in 2010 rose 44.4% to £36.3m from £25.1m in 2009. Reported profit before tax doubled to £55.2m from £26.9m, as 2010's results benefited from an £18.9m exceptional credit derived from a reduction in the liabilities of the group's UK defined benefit pension scheme.Operating margin improved to 16.1% from 12.4%, reflecting higher prices and a more efficient manufacturing cost base."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," said chief executive, Peter Page.Sales climbed 7.5% to £237.0m from £220.4m the year before. Sales grew in all the group's markets, except China, where a conscious decision was taken to reduce sales to satisfy strong demand elsewhere. Excluding China, sales volumes were up 11% compared to 2009.However, the company said demand for collagen casings is growing fast in China, and one of the group's most experienced directors is relocating to Hong Kong to enable the group to be better able to exploit opportunities in China and South East Asia.Net debt tumbled to £12.2m from £15.6m at the end of 2009, despite a significantly increased expenditure on fixed assets of £26.9m, up from £19.5m in 2009.The final dividend has been bumped up from 3.75p to 5.0p, making the total for 2010 7.0p, as against 5.0p in 2009.