Fresca chairman Chris Mack has underlined the company’s strong profitability despite a year in which turnover fell significantly and the supplier took a £3 million hit related to a failed IT project.
Kent-based Fresca posted a turnover of £379.4m for the year from 26 April 2014 to 24 April 2015, down substantially from the £426.8m recorded the previous year. When its share of joint ventures is deducted, turnover is £278.1m, down from £328.2m 12 months earlier.
The new figure means Fresca is likely to occupy a lower position in the 2016 FPJ Big 50 Companies report, having been in second place in 2015.
Mack said price deflation, which has affected company results across the category this year, was a principle reason for the drop in revenue, although the decision to offload the company’s wholesale market business in Cardiff also impacted on turnover. The Mack grape division also suffered a loss of trade.
That view was echoed by chief executive Ian Craig, who wrote in his report that “the fierce competition in the retail sector is driving prices further down, and while our volumes remain fairly stable (and in many areas have grown) the serious deflationary effect is felt by every part of the supply chain.”
Pre-tax profits were £4.4m, down from £7.4m the year before, however the difference was accounted for by a £3m exceptional loss attributed to the writing off of the company’s Project Compass ERP initiative.
“Our financial result this year is satisfactory,” said Mack. “We have achieved a good level of trading profitability in the face of significant price deflation, which accounts for much of the drop in turnover.”
Mack pointed out that Fresca’s joint venture businesses, including MMG Citrus, Thanet Earth, Manor Fresh and Primafruit have “traded with great success this year,” and gross profits rose five per cent for the year on the back of the strong JV performance.
Despite the Cardiff disposal, Mack underlined the company’s commitment to wholesale, stressing that Mack Birmingham is “gearing up for when the market eventually moves to its new location”.
In other news, Fresca announced the retirement of group finance director Mike Musk, who will be leaving at the end of November.
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