Produce World has announced a return to profit after completing a process of operational improvement and quitting unprofitable business.
The vegetable giant made an operating profit of £4.5 million on a turnover of £178m in the year to the end of June 2012, which represents a significant turnaround on the previous year’s figure of an £11.6m loss. It also revealed it had reduced its bank debt from £20.6m down to £6.5m.
Quitting unprofitable businesses and SKUs had been crucial both to the increased profitability and the long-term health of the business, according to chief executive William Burgess. Produce World sold its holding in Spanish brassica producer Agromark during the financial period, which brought a paper loss of £5m but would bring long-term benefits, Burgess said. The two companies are continuing to trade.
“Selling Agromark back to its founders was a strategic decision which has enabled the management team to concentrate on the core UK business,”
Burgess explained. “It has helped to reduce our debts at the bank, while removing the exposure of the group to risk, overheads and working capital demands of that business.”
The 2011-12 figures also include non-recurring costs of £3m related to restricting the operations, overheads and bank debt.
Burgess stressed that senior board appointments, such as those of chief operating officer Bob Moody, finance director Phil Jones, sales director Mark Phillips and chairman Neil Fraser had been key to the improved performance.
“The business is now in good health and, despite challenging weather and market conditions, we are on target as far as the 2012-13 financial year is concerned,” he said.
“Everything is pointing in the right direction in terms of our vision of being a financially secure, sustainable, innovative and customer-focused business providing excellent services and produce across the fresh vegetable category.”
