CANADA: Premium Brands continues restructuring drive
- Sales rose to C$266.9m (US$244.7m), up from $229.2m
- Net profit increased to $1.9m, compared to $1.2m
- Pre-tax earnings fell from $1.8m to $1.6m
- Gross profit up 24.8% to $15.9m
Premium Brands sales rise
Canadian specialty food company Premium Brands Holdings booked an increase in first-quarter sales but the profit picture was mixed as the group continued to restructure its business.
Sales increased by 16.4% in the three months to the end of March. According to Canaccord Genuity analyst Derek Dley organic growth was "strong" at 7.9%. However, he added: "We note that a third of the increase was related to pricing." Dley warned increased commodity costs could hit the group's margins for the next "couple of quarters".
Gross profit rose 24.8%. However, a 160% jump in restructuring costs meant pre-tax profit slipped 11.5% in the period. A decrease in tax expenses raised the bottom line, with net profit increasing 59.6%.
Premium Brands is revamping its production of deli meats, including the expansion of capacity at its Freybe Gourmet Foods plant in Langley in British Columbia. It is building a new sandwich production facility in Ohio in the US. However, the company is also "rationalising" its direct-to-store distribution business for the convenience store channel.
Click here to view the release from the company.
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