Logistics provider Christian Salvesen has issued a warning that this year’s poor harvest of vegetables for processing in the UK is still hitting its UK business as it posted a 12 per cent drop in half-year profits.
The company has blamed what is said were the worst growing conditions for 20 years for the slump, which cut its vegetable processing volumes by 40 per cent.
It is also recovering from a succession of unrelated problems earlier in the year including the accidental defrosting of a £1.5m batch of peas.
Salvesen reported today that pre-tax profits before one-offs sank to £8.4 million from £9.6m last year.
Although it is based in Northampton, Salvesen operates in eight European countries but stressed the sharp fall in profits at its UK business was behind the overall poor performance.
Operating profits in the UK dropped to £4.4m for the six months to September, down from £10.3m for the same period last year.
Salvesen added that contract losses and rising fuel prices had also taken their toll and warned that trading could remain tough for some time.
"Our markets remain competitive and we are cautious about the rate of progress that can be achieved," executive chairman David Fish said. He added the firm said it expects full-year results to be broadly similar to last year.
In the rest of Europe, its Spanish, Portuguese and French industrial operations - which include supply chain services for the automotive and chemical sectors - made good progress, while its food and consumer businesses were stable.
Looking ahead, Salvesen added that it did not expect its new chief executive Stewart Oades - a senior executive at rival Exel - to take up his post until May next year.
The warehousing and distribution firm also said it had no immediate plans for consolidation, after the collapse of merger talks with TDG last month.
"I don't think it (a merger) is desperately important, we don't rule it out but we have lots to do and we think we are making progress," Mr Fish added.
The disappointing figures hit the firm's share price, which by Tuesday lunchtime was down 4.5 pence (7.6 per cent) at 55p.
No comments yet