Canterbury Foods, which produces meat and pastry products for the UK foodservice industry, has said it achieved a much-improved group financial performance for the first half of 2004.

For the six months ending 30 June 2004 the company reported an operating profit of £517,000 (US$0.92m) (excluding interest, goodwill amortisation and exceptionals), compared to an operating loss of £22,000 for the equivalent period in 2003. The company said the improved performance was a result of investment into efficiencies and cost reduction, moving to third party distribution and reducing the number of products and complexity in the group. 

Overall, sales from continuing businesses in the first half were £23.5m, compared to £23.6m in the year-ago period. The company said good gains were achieved in sausages and pastry products, offset by a further reduction in burger volumes, primarily caused by the planned exit from non-profitable business. 

Regarding current trading, Canterbury Foods said sales in August were good after a disappointing July. The company said it has raised certain prices to offset increased meat costs and has successfully renegotiated its insurance contract with a significantly reduced premium. 

In the second half the company is planning further cost and efficiency improvements in order to maintain profitability despite the continuing high meat prices and increased interest levels.

"We therefore look forward to continued progress in performance during the second half year and beyond and we expect, at this stage in the financial year, to be on track to meet the market's expectations," the company said.