Lanarkshire sausage skin maker Devro saw its profits and revenue fall, partly due to challenges in some markets and other ongoing pressures.

The maker of collagen sausage skins reported a pre-tax profit of £17.5 million in the 12 months to the end of December 2018, down from £21.6 million in the previous year. Its revenue fell to £253.4 million from £256.9 million. But it increased its dividend per share to 9p from 8.8p.

Devro , based in Moodiesburn, said it faced market challenges in Russia, where volumes were down 12%, and Japan (down 7%). China was down 8 per cent due to Devro discontinuing imports of legacy products.

The company said it substantially improved North American plant operations and successfully launched its Fine Ultra product platform in Europe, Japan and SE Asia. It added that volumes were maintained year on year, with strong growth in North America (up 8%), Latin America (up 9%) and SE Asia (up 6%).

Rutger Helbing, chief executive officer of Devro, said: “We continued to make significant progress on our strategic priorities in 2018, delivering manufacturing efficiency improvements, in particular at our US plant, driving average selling price improvements in China and establishing the building blocks for future growth supported by our new Fine Ultra product platform. We over-delivered on our Devro 100 cost savings programme and, in addition, we increased margins.”

He added that the firm expects to grow revenue, supported by an overall growing market and the continued rollout of the Fine Ultra product across a number of markets. It plans to leverage its leading position in the fast-growing protein sticks market and to continue to convert customers from gut to collagen. It will also focus on delivering margin expansion and generating cash to reduce net debt.

He said: "Despite ongoing pressures from input cost inflation, principally salary and utility costs and exchange rate volatility, at this early stage of the year the board believes that Devro is well placed to make good progress in 2019."

John Moore, senior investment manager at Brewin Dolphin Scotland, said: “It’s a mixed set of results from Devro. While the business launched its Fine Ultra product and saw growth in markets such as North America, Latin America, and South East Asia, this was offset by weaker sales of legacy product and revenues fell overall.

“To a certain degree, the business has suffered from unfortunate timing – it made significant investment in new plant only to see a weak point in demand. That said, as demand starts to pick up it should be well placed.”