Pinched consumers, the cost of promotions and the rise of the discounters have combined to create a “very challenging” UK market, according to convenience food maker Symington’s, which has reported a slump in full-year profits.
The owner of Ragu and Chicken Tonight saw profit before interest, tax, depreciation, exceptional items and goodwill amortisation fall to £14.9m in the year ending 23 February 2014, compared with £16m during the previous year.
The figures filed at Companies House this week revealed the drop in full-year profit despite a 5% increase in sales to £148m.
Profit was also lower thanks to higher operating costs, which included ongoing restructuring initiatives and the “prolonged” integration, now complete, of its Victoria and Goldenfry acquisitions into its Bradford factory.
Symington’s, which also produces brands under licence in the UK including Campbell’s, said it had invested in its manufacturing and product development to be more responsive to changes in the market.
The company refurbished a new production facility close to its Leeds factory during 2012 and 2013, incurring “significant pre-opening costs”. The site, which opened in April, enables the group to manufacture noodles for its snack products rather than importing them from China, making it more competitive and shortening its supply chain as well as adding capacity for future growth.
Symington’s included the investment in the new facility in its exceptional items, which - together with goodwill amortisation costs - further cut pre-tax profits on ordinary activities to £4.9m (down from £10.1m the previous year).
During 2013 the company completed its first overseas acquisition when subsidiary Symington’s (Holdings) bought the rights to the Chicken Tonight, Raguletto and Five Brothers brands in Australia and New Zealand from Unilever.
Symington’s said the new business had performed ahead of expectations and, together with the launch of Symington’s UK snack and home baking products into Australia, was helping diversify the business and mitigate risk.
This story was amended on Tuesday 26 August to remove reference to Aunt Bessie’s, which is owned by William Jackson Food Group, and not Symington’s.
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