UK potato supplier Produce Investments has returned to profitability in the first six months of its fiscal year, with price increases and a focus on efficiency lifting the bottom line.
In a trading update today (26 March), the group reported operating profit of GBP5.8m (US$9.6m) in the period to 31 December, up from a loss of GBP681,000 last year. The company booked a profit after tax of GBP3.9m, compared to a loss of GBP932,000 a year ago.
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The improved profitability came despite lower sales. Revenue dipped 0.1% to GBP89.6m.
Produce Investments has worked to lower its cost base and CEO Angus Armstrong confirmed today it is considering the closure of one of its three main packing facilities, Tern Hill in Shropshire.
“The business continually reviews its core capacities and recent efficiency improvements mean that with slight modifications at its two remaining packing sites at Duns in the Scottish Borders and Floods Ferry in Cambridgeshire an opportunity exists to rationalise the number of sites,” he said.
Shore Capital analysts noted the progress Produce Investments has made on improving efficiency. “We believe management continues to make progress in what remains a challenging retail environment. A drive to create an increasingly efficient business remains a key focus and, to that end, the closure of one of the group’s packing sites is being considered,” the analysts wrote in an investor note.
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By GlobalDataProduce Investments said discussions to acquire Jersey Royal Company are “ongoing”.
It added the development of its brand, GreenVale, is progressing “ahead of expectations”.
