UK: Higher margins, new business boost Scottish Salmon Co.
- Sales in Q1 total GBP27.69m (US$48.79m), compared to GBP18.74m
- EBITDA before adjustment for biomas up 67.2% to GBP6.02m
- Net earnings up 668% to GBP7.68m
The Scottish Salmon Co. reported a "highly successful" first quarter as new supply contracts and improved margins boosted operating profit.
The company said "growing" exports and a new deal to supply a "top London food outlet" resulted in higher sales in the period.
Sales increased to GBP27.7m (US$46.8m), a near-50% increase on the year. The proportion of sales generated through exports increased to 48%, compared to 35% in the comparable period of last year.
EBITDA before adjustments for the fair value of biological assets rose 67.2%, with margins rising to 15% from 10% in the first quarter of 2013.
Net income was boosted by a jump in the valuation of the company's salmon stock. Net income increased 668% in the period.
Revenues up by 48% on Q1 2013 by £9m to £27.7m which represents a record Q1 for The Scottish Salmon Company EBIT before Fair Value Adjustment £0.68 per kg (Q1 2013: £0.35 per kg) Exports increased to 48% of revenue in Q1 with strong demand for Scottish salmon particularly in Europe, USA and the Far East (Q1 2013: 35%) Improved biological performance with mortalities lower than expected with good growth conditions New and exclusive two-year contract with top London sushi chain - as a direct result of market-led strategy Loch Fyne Oyster's recent Queen's Award highlighted SSC quality as its sole salmon supplier
The Scottish Salmon Company (SSC) has reported a highly successful first quarter to 2014, boosted by a new and exclusive two year contract with a top London foodie outlet and a growing export market.
The results for Q1 in a strong market, including significant increases in both turnover and profitability over the same period last year, are a direct consequence of the shift from a production focus to a more market led business strategy introduced by new Managing Director Craig Anderson.
Revenues for January to March 2014 were £27.7m (Q1 2013, £18.7m) and EBIT £4.1m (Q1 2013, £1.8m). With good biological performance, these results were achieved on harvested volumes of 6,004 tonnes (Q1 2013, 5,092 tonnes).
Exports for the quarter were up, representing 48% of revenue in Q1 (Q1 2013: 35%), as demand rises in Europe, America and in the Far East, where new markets are developing. The overseas customer base is also expanding in the high-end marketplace, with another new contract with the top Swiss food retailer, allowing the company to capitalise on current strong market prices
On the domestic market, the deal to supply a chain of 48 restaurants and food shops that have built their reputation on healthy food and sustainability, with salmon for sushi reinforces SSC's market position for quality and freshness.
SSC's ability to deliver high quality, premium salmon consistently year round is fundamental to this success at home and overseas and is the result of an ongoing capital investment programme to balance production, introduce husbandry improvements and continually develop all elements of the supply chain.
Craig Anderson said:
"SSC is a re-energised company, open for business, establishing new markets and moving forward with quality fish, at the right size and delivered on time.
"Having made positive moves towards balancing production cycles through organic changes and new consents, we have shifted our focus. Through an intense process of market and client engagement we are building our customer relationships on solid principles of knowledge and understanding of their priorities and requirements. It is making a tangible difference. The new deals with and top tier Swiss and London retail brands are testament to that.
"Last month, as sole supplier to our sister company, Loch Fyne Oysters, consistent high quality was also an important factor behind its success in winning the Queen's Award for Enterprise, in the category for international trade.
"To support the company's new focus, we are strengthening our management team with outward looking skills that will support our aspirations as a leading producer of premium salmon for a growing domestic and export market."
Capital investment for the year ahead is estimated at around £12m, while the Company has committed further investment in the project to develop farmed Ballan Wrasse, or 'cleaner fish', for use in the salmon pens as a compliment to conventional treatment strategies.
Original source: Scottish Salmon Co.
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