Sausage skin firm linked to high dividend

DEVRO, the world's largest sausage casing company, has increased its dividend payment for the first time in four years, after a surge in profits last year.

Chief executive Peter Page, who joined in 2007, had said Devro would freeze dividend payments until earnings were at least twice the level of its dividend payments. The final dividend is 3.575p, making a total of 5p, up 12 per cent.

Underlying operating profits at Moodiesburn-based Devro for the 2009 calendar year rose 33 per cent to 27.4 million. At the pre-tax level, profits rose by 76 per cent to 26.9m, boosted by foreign exchange movements and an exceptional gain from the closure of a medical plan in the US.

Page said much of the improvement in its trading came from improved operating efficiencies, as well as an increase in prices to customers. Devro is expecting to spend around 26m on capital expenditure in 2010, a 47 per cent increase on last year, as it installs new manufacturing lines in the Czech Republic and Australia.

Shares rose 1.25p to 150p.