Market report: Investors shed shares in Devro

Investors shed shares in Devro yesterday as the sausage-skin maker warned profits will be down £8m this year.

The maker of coatings for the British banger, the Chinese Lap Cheong and the south American chorizo said a series of issues, including currency devaluation in south America, weak demand in Europe and a pork import ban in Russia, hurt volumes.

Sales in Germany, Japan, China and the US were better but overall volume and prices were expected to be flat and the shares tumbled 10 per cent, or 25.5p, to 211.5p.

Darren Shirley at Shore Capital said its “margins and returns” are likely to “tread water post the immediate markdown”.

The wider market was buoyant on the back of M&A activity.

Chris Beauchamp, market analyst at IG, said: “The week has got off to a good start… renewed merger and acquisition activity is leading us back [up].” The FTSE 100 edged up 14.47 points to 6,700.16.

Deals included mega-mergers in the pharmaceuticals world such as US drugs giant Pfizer’s attempted move for AstraZeneca. Astra jumped to the top of the leaderboard, 586.5p better at 4,666.5p.

FTSE 250 defence firm Ultra Electronics has bought a Canadian outfit Forensic Technology in a C$94m (£51m) deal. Forensic, whose clients include the UK police’s National Ballistics Intelligence Service, was sold by private investors and its management team. Ultra fired up 1p to 1,734p.

Electra Private Equity has bought a €40m (£33m) stake in Bank of England plastic notes-maker Innovia. Electra with private-equity firm Arle Capital, which has bought Innovia in a €498m deal. Electra rose 25p to 2,665p.

Despite the flurry of deals Ophir Energy’s advances were snubbed by Premier Oil and Ophir said it is no longer “considering making an offer”, which rules it out from bidding again for six months. It had wanted to team up with its FTSE 250 rival to create a £3bn oil explorer and producer. Premier, which said it has found oil in Indonesia and Pakistan, saw its shares firm 2.7p to 329.4p. Ophir slipped 1.9p to 241.4p.

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