Sausages skinned by pork prices

  • @LauraHChesters

Waning appetite for bangers and mash in the UK has produced a 4.5 per cent fall in annual profits at the sausage-skin maker Devro.

Soaring pork prices have led to a decline in UK sales of sausages, chorizo and pepperoni in the UK, with a 5 per cent drop in demand in the past two years.

Sales in Europe, Australia and Russia have not been much better and, although Devro met City forecasts with a pre-tax profit of £37.5m for 2013, its weak outlook for 2014 prompted a 9 per cent fall in the shares to 277p.

The chief executive, Peter Page, said the outlook "for important markets, such as the UK, Russia, the US and Australasia, is less clear".

He added that the group will consider cuts at factories where the cost of production is highest, to reduce expenses this year.

Sales in the hot-dog nation of the US were up just 2 per cent. But there was better demand in emerging markets such as China, South-east Asia and Latin America, where total sales volumes of sausage casings jumped by 10 per cent.

Devro said it will invest £50m in a new manufacturing plant in Nantong, near Shanghai, to meet Chinese demand.