Glasgow-based sausage skin and food collagen products firm Devro said its revenue grew 1.9% to £252.4 million in the year to December 31, 2021.

Underlying operating profit rose 2.9% to £42 million and total dividend for the year rose 3.3% to 9.3p.

In its outlook, Devro said: “The group expects an inflation headwind, mainly driven by energy and raw material costs.

“To mitigate impact, in H2 2021 and early in 2022 the group has enacted inflation-led price rises.

“Pricing action successful to date.

“The group has started 2022 well and expects to make good full year progress based on current market conditions and the robust order book and pipeline.

“This is despite the £3.1m hedging gain from 2021 not repeating in 2022 giving a foreign exchange headwind.

“We expect another strong year of cash generation, despite higher capital investment to meet future growth.”

Devro CEO Rutger Helbing said: “We made significant strategic and financial progress in the year.

“Our improved performance was achieved despite ongoing challenging market conditions, including inflationary headwinds.

“We are also pleased with our free cash flow performance which provides us with increasing optionality to invest in new products, to increase manufacturing capacity and to grow the dividend.

“The group has started the year well and, despite ongoing macro-economic headwinds including inflationary pressures and based on current exchange rates, we expect to make good progress in 2022.”