Fresca group has blamed tough market conditions for a decline in profits in what it has called a “disappointing” set of annual results.
The Kent supplier this week filed results showing turnover had risen by almost £4 million to £393.5m in the period from 30 April 2011 to 27 April 2012. But pre-tax profits took a major tumble, falling from £7.3m in 2011 to £2.6m.
Some £3.1m of that fall was attributable to operating losses and closure costs at the Liverpool Produce Terminal, which Fresca shut down last November.
The bigger picture was the UK economic crisis, with high inflation, increasing unemployment and a squeeze on household incomes, meaning most customers suffered a reduction in volumes sold, chairman Chris Mack said.
It was also a particularly hard year for the grape and banana businesses, Fresca reported. The grape business suffered a reduction in margin and volumes as customers started to buy fruit directly from more “straightforward” sources such as South Africa, while the banana side was hit by oil price increases bringing higher shipping costs in early 2011.
However Mack revealed the banana business is now hedging its exposure to fuel costs, increasing trade with new customers and “returning to a more acceptable level of profitability”.
Elsewhere the company reported that the stonefruit division had performed well, there are still development opportunities in the berry business and Mack Wholesale had a “satisfactory” year.
Primafruit and Valefresh both had a good year developing fruit supplies to Waitrose, their main customer, and also began supplying bananas ripened at the new Fresca-operated facility in Bishop’s Stortford.
MM Global Citrus had a tough 12 months with supply, quality and margin issues, but the business finished the year strongly, Mack said. The Thanet Earth glasshouse operation overcame the challenges of poor weather and the E. coli crisis to perform well.
“I am pleased to report that despite some of the worst summer weather in the UK ever recorded, the new financial year has started well and we look forward to the business returning to a more satisfactory level of profitability this year,” Mack concluded.
