China Food Company, a Chinese cooking sauce manufacturer, has fallen into the red as investments in expanding its operations and costs linked to the launch of its new Xaka soya sauce hit the bottom line.
The London-listed company said today (28 May) it made a pre-tax loss of GBP338,000 (US$530,118) in the full-year ended 31 December, down from a profit of GBP3.8m in 2010.
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China Food emphasised its strategy to invest in expansion was benefiting the top line, with sales growing 12.1% year-on-year to GBP40.2m. Gross profits increased by 9.4% to GBP8.6m.
Commenting on the result, chairman John McLean said 2011 was a period of “further sales growth” as the group “increased its penetration into the condiments market in Northern China”.
McLean said the company has enjoyed a “strong” start to 2012, as its investments in food safety and branding have allowed it to capitalise on a buoyant consumer market in China. Trading of condiments in the first quarter has risen 10% year-on-year, the group revealed.
“We have identified an opportunity to become a major player in the Northern China condiments market and are committed to investing in the growth of the group,” McLean said. “Whilst the marketing expenditure will suppress profitability temporarily, the board is confident that the investment for the future will pay off.”
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