Lower promotional activity slows Devro

Devro, which makes manufactured casings such as sausage skins for the food industry, said 2011 sales are slightly behind last year's, but margins have continued to improve.Speaking at the group's annual general meeting, Steve Hannam, chairman of Devro, said the company is on track to meet the board's expectations for the full year."Although total sales are slightly behind last year, Eastern Europe, Russia and SE Asia have all shown solid growth, offset by more challenging conditions in lower-priced markets, including China," Hannam said. Hannam attributed this year's relative shortfall in sales this time round to the lower level of promotional activity by UK retailers compared to last year.Recent events in Japan, which represents less than 5% of group turnover, have not had a significant impact on the business, Hannam revealed.Closer to home, adverse weather conditions in the UK in the early part of 2011 did slow the manufacturing performance of some divisions but things are now returning to normal."The benefits of last year's investment programme are also starting to come through, with improved manufacturing efficiencies partially compensating for some increased input costs. Capital investment projects for 2011 are proceeding as planned," Hannam said.