Top story
The US and China are being targeted in a major new government strategy to boost food and drink exports post-Brexit, The Grocer can reveal.
The Department for International Trade has identified the two economic giants, alongside India and the UAE as key territories where food and drink exports can be ramped up.
The Grocer has learnt the government had earmarked private label, meat and dairy, alcohol mixers (including cordials, tonics and wine and spirits) as well as the booming organic and free-from sector, among those areas where they believe there is the most headroom for growth.
The moves follow last August’s launch of the government’s export strategy, in which international trade secretary Liam Fox set out plans to make the UK an “exporting superpower” and get 400,000 more companies to begin exporting.
The DIT has recruited specialist advisers from the food industry to help its strategy, which includes elements such as bringing buyers from the key target countries to visit the UK and meet firms in the sectors, ramping up the UK’s presence at key foreign trade fairs and increasing the involvement of high commissions and embassies in carving out deals.
The DIT’s strategy is working alongside talks over a sector deal for the industry being negotiated between Defra and the new Food & Drink Council, which is set to include major elements of extra support for exports.
According to the FDF in Q1 2019 exports of food and drink increased by more than 10% to £5.8bn, almost twice the growth rate of exports in Q1 2018 and the biggest first quarter sales value on record, but both government and industry leaders told The Grocer they believed there was room for a major expansion.
Read the full story on thegrocer.co.uk/finance later this morning
Morning update
Morrisons (MRW) is reaping the benefits of ending its exclusive deal with Ocado by developing a closer relationship with customers through Amazon and rolling out rapid delivery.
The supermarket is to extend the ‘Morrisons at Amazon’ rapid grocery delivery service to cities across the UK this year.
It will also gain more control as a retailer on Amazon’s site, rather than being a wholesaler to the internet giant, including setting prices and collecting customer information.
Those changes would not have been possible before May this year, when Morrisons was tied to Ocado as its exclusive digital partner and limited to a wholesaler relationship with Amazon.
Upmarket ready meals supplier Charlie Bigham’s has posted a £9.3m jump in annual sales in its most recent financial year, but investment in growing capacity sent the company into the red.
Newly filed accounts at Companies House show an 18.6% jump in annual sales to £59.3m during what CEO Patrick Cairns called a “transformational” year to 31 August 2018.
Revenue growth was primarily driven by increased sales of its core branded ready meals range, as a result of increased distribution within supermarkets and higher levels of consumption among existing customers. The opening of a new kitchen facility near Wells in Somerset also underpinned growth.
However, the increased costs associated with opening a second site ate into the supplier’s margins during the reporting period.
The company dropped from an operating profit of £4.6m to a loss of £1.4m. Its pre-tax loss was £1.8m compared to a pre-tax profit of £4m in the previous year.
Read the full story later today at thegrocer.co.uk/finance
On the markets this morning, the FTSE 100 has opened down 0.4% to 7,341.2pts so far today.
Early risers include McColl’s (MCLS), up 5.7% to 79.2p, Bakkavor (BAKK), up 2.1% to 128.4p and Hilton Food Group (HFG), up 1.6% to 965p.
Fallers include FeverTree Drinks (FEVR), down 6.4% to 2,285p, DS Smith (SMDS), down 1.9% to 353.9p and British American Tobacco (BATS), down 1% to 2,888p.
Yesterday in the City
Majestic Wine’s shares soared by 9.3% on Wednesday on rumours that PE firm Elliott Advisors had entered the hunt to buy its UK retail chain, but slumped back down 8.2% yesterday back to 292p after releasing a mixed set of annual results.
Majestic confirmed it was in “advanced discussions” to sell its UK retail network, but the shares fell back on a pre-tax annual loss of £8.6m and a decision to scrap its annual dividend, to be replaced with a one-off payment only if the sale is successful.
Marks & Spencer (MKS) was down 1.5% to 216p after it failed to persuade a full allocation of investors to take up its discounted rights issue to fund its joint venture with Ocado.
Conversely, Morrisons (MRW) was up 2.2% to 199.5p as news emerged of its expansion of its online distribution deal with internet retail behemoth Amazon.
Tesco (TSCO) ended the day up 0.9% at 229.5p after sharp losses in early trading as investors digested its slowdown in first quarter growth amid evidence it contines to outperform the wider UK grocery market.
The FTSE 100 ended the day flat yesterday, remaining at 7,368.5pts.
The day’s fallers included McColl’s (MCLS), down 6.5% to 75p, Greene King (GNK), down 6.1% to 612.4p, FeverTree Drinks (FEVR), down 5% to 2,440, Mitchells & Butlers (MAB), down 3.6% to 278.5p, McBride (MCB), down 2.9% to 82.5p and WH Smith (SMWH), down 2.9% to 1,979p.
Risers included Real Good Food (RGD), up 11.5% to 7.25p, DS Smith (SMDS), up 5.1% to 360.8p, Bakkavor (BAKK), up 2.6% to 125.8p, C&C Group (CCR), up 2.3% to €3.74 and PayPoint (PAY), up 1.7% to 1,068p.
No comments yet