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Devro unveils plans to improve margins

The sausage skin maker maintained its dividend and unveiled fresh growth plans after a difficult 2016
Devro unveils plans to improve margins

November's gruesome profit warning ensured that Devro (DVO) investors were braced for disappointment from its full-year results, and eager to discover how the sausage skin maker would get closer to full capacity. The answer came in the form of a strategic development programme, focused on enhancing sales capabilities, improving manufacturing efficiencies and launching differentiated products.

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These measures are expected to generate returns of £13m-£16m a year by 2019, but have required short-term exceptional costs estimated at £12m-£14m, as well as capital investments of £7m-£8m. Altogether, the company said the spend would still be below that of the past three years. At least the dividend was maintained, and the shares did finish higher on the day.

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