Tyrrells owner Amplify seeing "near-term market headwinds"

Tyrrells owner Amplify seeing "near-term market headwinds"

Amplify Snack Brands president and CEO Tom Ennis today (8 August) asserted the US owner of brands including SkinnyPop and Tyrrells is "in the right space" after the popcorn and crisps maker lowered its forecasts for annual sales and underlying EBITDA.

Ennis said Amplify was "encouraged" by its first-half performance - which included higher sales and lower profits - but indicated trading conditions on both sides of the Atlantic meant it was cutting its estimates for full-year net sales and adjusted EBITDA.

"Although we are encouraged by our first half performance, success of our new innovation and international momentum, we are updating our annual outlook for 2017 to reflect the continued near-term market headwinds we are experiencing in the UK and continued softness in US food," Ennis said. "We are in the right space, with the right brands with plenty of whitespace and runway ahead of us for continued profitable growth. We remain committed to executing on our strategic initiatives to drive sales growth, profitability and value for our shareholders."

Amplify, which also owns the Paqui tortilla chip brand, is forecasting net sales will reach between US$385m and $400m in 2017, up from the $270.8m it booked in 2016. However, in May, when Amplify reported its first-quarter results, it estimated net sales would climb to between $404m and $420m this year.

The company expects its adjusted EBITDA will hit $92m to $100m in 2017, up from $84.9m it generated a year ago. In May, Amplify forecast its 2017 adjusted EBITDA would reach between $103m and $111m.

For the six months to 1 July, Amplify's net sales jumped 64.8% to $188.2m. It pointed to the contribution of recent acquisitions Tyrrells and Oatmega, while saying it had seen "strong growth" from SkinnyPop on the back of product innovation, as well as new distribution for Paqui.

Amplify's operating income fell 13.4% to $30.8m amid a jump in SG&A costs. The company's reported net income was down 90% at $1.7m, on the back of a more than trebling in the company's interest expenses and a rise in acquisition-related costs.

The company said its first-half adjusted EBITDA, under which it makes certain adjustments to net income, was up 3.4% at $42.7m.

As a percentage of net sales, Amplify's adjusted EBITDA was 22.7%, down from 36.2% a year ago, which the company said was due to the addition of the Tyrrells and Oatmega brands, as well as investments in marketing, infrastructure and personnel.

Alongside the results, Amplify said Ben Clarke, the former CEO of UK biscuit maker Burton's Biscuit Co., had agreed to join its board. Clarke joined the business earlier this year after the departure of the president of the company's international business, David Milner.

At the time, Ennis said Clarke had joined the business to "help with the leadership transition" and to be involved in the company's international strategy development while it looked for a replacement for Milner, who had joined the business from Tyrrells.

Ennis said today: "Ben is a seasoned executive and has significant experience navigating the UK food retail landscape through his prior leadership experience at Burton's and Kraft and has already been an invaluable member of the Amplify team."