UK: Zetar sales slide on "disappointing" Easter
- Sales dip 5%
- Profits "in-line" with expectations
- Upbeat outlook
UK confectionery and snacks group Zetar booked a 5% slump in full-year sales, on the back of a weaker Easter performance and the offloading of lower-margin business.
In a trading update released this morning (15 May), Zetar said sales dropped to GBP128m (US$205.6m) in the year ended 30 April. Confectionery sales increased 2% to GBP88m while natural snacks slumped 18% to GBP40m.
Confectionery sales were dented by a "relatively disappointing" Easter. Natural snack revenues were hit by higher commodity prices, which resulted in lower volumes as price increases were passed along. These losses were partially offset by a 20% increase in branded value-added sales, Zetar added.
The company said that it has made "good progress" in "increasing the proportion of everyday sales" and extending its branded portfolio.
"The group has made good progress in developing its everyday business and growing its branded sales, underpinned by our continued focus on product innovation," CEO Ian Blackburn said.
Zetar also revealed profits for the year were "in-line" with market expectations.
Liberum analyst Patrick Coffy told just-food he estimates profit before tax will come in at GBP5.5m. In 2011, Zetar reported profit before tax of GBP6.7m.
Coffy said he expects Zetar to achieve a full-year EBIT margin of 5% and he anticipates the group will benefit from a shift in product mix towards more value-added business over the next two years, with margins expected to grow to 5.7% and 6% in fiscal 2013 and 2014 respectively.
Zetar said it is beginning the new financial year in a "positive frame of mind", having confirmed GBP13m of new everyday sales, reducing seasonal dependency, and expanding with new product launches and growth in France.
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