Shares in beleaguered European chilled food supplier Uniq fell sharply after the company issued a gloomy Q3 trading update. The company’s share price fell by over a third, falling as low as 42p during Wednesday trading, after a previous close price of 77p.
At its lowest point, the price was 81% down on its 12-month high of 226.5p. Uniq’s statement warned that the group would incur a trading loss in the second half of 2008/9, while overall sales were flat year-on-year.
“Disappointing” margin performance was blamed on a shift towards products with lower added value, and the increase in the number of price-discounted lines. UK sales grew 1.7%, up from 0.5% in the first half of the year, and the company said that it was expected to deliver a trading profit in the second half of the year, “albeit at a much lower level than last year, and still dependent on the Christmas period”.
Analyst Numis said it saw “no value attached to the UK business, which has a turnover of £350m and makes no profit”.
Over a quarter of Uniq revenues come from Marks & Spencer, which toughened trade terms with many suppliers as part of Project Genesis. Earlier this year Uniq announced the closure of its Riviera plant in Devon, which supplied own-label Marks & Spencer desserts, after the company made a pre-tax loss of £44.1m in 2007.
Fellow Marks & Spencer supplier Northern Foods this week reported underlying sales growth of 3.9% year-on-year despite a fall in volume of 1.7%. In the ready meal market, Northern Foods reported growth of 4.5% against a market that fell 2.4%.
At its lowest point, the price was 81% down on its 12-month high of 226.5p. Uniq’s statement warned that the group would incur a trading loss in the second half of 2008/9, while overall sales were flat year-on-year.
“Disappointing” margin performance was blamed on a shift towards products with lower added value, and the increase in the number of price-discounted lines. UK sales grew 1.7%, up from 0.5% in the first half of the year, and the company said that it was expected to deliver a trading profit in the second half of the year, “albeit at a much lower level than last year, and still dependent on the Christmas period”.
Analyst Numis said it saw “no value attached to the UK business, which has a turnover of £350m and makes no profit”.
Over a quarter of Uniq revenues come from Marks & Spencer, which toughened trade terms with many suppliers as part of Project Genesis. Earlier this year Uniq announced the closure of its Riviera plant in Devon, which supplied own-label Marks & Spencer desserts, after the company made a pre-tax loss of £44.1m in 2007.
Fellow Marks & Spencer supplier Northern Foods this week reported underlying sales growth of 3.9% year-on-year despite a fall in volume of 1.7%. In the ready meal market, Northern Foods reported growth of 4.5% against a market that fell 2.4%.
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