The Fresca Group has blamed a number of exceptionals for its first trading loss in recent memory, but has insisted that the business overall is in good shape.
Chairman and chief executive Chris Mack announced the disappointing results for the year to 30 April 2013 on Friday. He said: “This year, for the first year in my memory, our company is posting a loss for the year. Although the trading climate has continued to be extremely tough, I am keen to stress that this is the result of exceptional items and problems affecting two parts of our diverse group of businesses. For the most part, the group has continued to perform satisfactorily.”
Although total sales at the group increased by 2.4 per cent from £393 million to £403m, the company posted a pre-tax loss of £395,000, compared to a profit of £2.6m in the previous year. On an ongoing basis profit before tax, excluding discontinued and exceptional items, fell from £6.6m to £5.5m.
Mack added: “Despite reporting a small loss, we have however, successfully reduced our net debt from £6.7m to £5.2m and our net assets remain very strong at £46.3m.”
Parts of the group’s business have struggled while others have flourished. Mack Service in Southampton was formed to service a growing demand for leafy and fruit salads for airline caterers and three years ago expanded with encouragement from retail customers to meet a growing demand. However, it has delivered significant losses. Mack said: “Since making our decision to invest in this sector we have seen a serious reduction in the retail price of these products, driving value out of the category. The market for these products has now ceased to grow. Against this background, we reluctantly decided that we had no alternative but to enter into consultation with our employees and ultimately close the business….The costs of closure have been considerable.”
The group’s field vegetable and potato operations DGM Growers and Manor Fresh both suffered with last summer’s dismal growing conditions. And the Mack grape operation has also been under pressure, losing support from major growers and customers.
Mack said: “Formerly a significant contributor to the division’s profitability, this department made very little profit in the year. We have responded as energetically as possible, making substantial management changes. It is today a much stronger place, refocused on re-building a business around our core values and the progress of the new team has been recognised by growers and customers alike.”
Highlights for the group were a strong performance from the stonefruit and soft-fruit teams at Mack Multiples and sales and profits both grew at Fresca’s Thanet Earth glasshouse business.
