Produce Investments, the owner of UK potato supplier Greenvale AP, has reported an operating loss of £680,000 for the 26 weeks ending 29 December 2012, down significantly from the prior year’s profit of £4.76 million.
The company, which supplies retailers including Tesco and Sainsbury’s, cited last year’s wet weather as a reason for the loss as it negatively impacted on crop yields.
Chief executive Angus Armstrong explained: “As a consequence of this low-yield and high-waste crop, free-buy prices for potatoes are exceptionally high and additional imported tonnages are being sourced to help to fulfil the current UK market requirements.
“Both of these factors have impacted our raw material costs in the first half of the year and it is likely that this will continue to be the case until we get into next season’s crop.”
Armstrong added that the company is now working hard to increase potato prices in order to cope with the rise in cost of raw materials and predicted that the business would improve its performance and meet all of its targets in 2013.
However, despite the loss, revenues rose 13 per cent from £79.4m to £89.7m for the same period in 2011. The firm’s net debt increased to £26m from £9m in 2011, fuelled by the acquisition of Cornwall-based potato grower Rowe Farming.
Meanwhile, the company has announced the recruitment of a new non-executive director which it says will be a “valuable appointment”.
Tony Bambridge, who is chairman of the company’s UK potato business Greenvale, will take up the role. “We are pleased to announce today the appointment of Tony Bambridge to the board with immediate effect,” Armstrong said.
“Tony has been involved in the company since 1999 in his role as chairman of Greenvale AP and with his extensive background in the agricultural sector we believe he will be a valuable addition to the board.”
