Chaucer Food Group has reported double-digit jumps in sales and underlying profits as it gets closer to securing about $70m of new investment in the US.

Revenues rose 17% to $139.3m (£114.3m) as the UK-headquartered business, which supplies freeze-dried fruit and veg to global giants such as Kellogg’s, Unilever, Nestlé and Starbucks, boosted its US capacity with a new factory in Oregon. Operating EBITDA also increased 20% in 2015.

Chaucer is currently in late-stage talks with a handful of potential investors in the US to take over the stakes of UK shareholders Caird Capital, Endless and HSBC and scale up in the country, as revealed by The Grocer in April.

CEO Andy Ducker said the high levels of interest in the business had given him the confidence to commit to doubling the capacity of the US facility by 2017. The US currently makes up 10% of group sales, and is expected to grow to 30% in the next two years. There are also plans to bring its Crunchies freeze-dried brand to Europe.

Ducker will draw up a shortlist of investors this month, with the deal expected to complete by the end of November. He added that strong growth would continue into 2016 and 2017, with little impact expected from the plunge in sterling since Brexit.

“We are a dollar-denominated business, so the strong dollar is good news for us and we are also pretty well hedged through 2017,” Ducker said.

The UK bread business, which is headquartered in Hull, buys all its raw materials in the UK, so should also not be affected by the currency volatility, he added.

Although underlying profits grew in 2015, Chaucer slipped into the red after being hit with $4m of one-off costs related to air freight charges. An import alert restricting imports to the US from China coincided with a scheduled relaunch for Kellogg’s Special K and Chaucer was forced to fly freeze-dried strawberries around the world to meet the cereal giant’s deadline. It resulted in an operating loss of $266k in 2015.

Source

Edward Devlin

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