Hains has faced challenges in UK

Hains has faced challenges in UK

US-based natural and organic food maker Hain Celestial said it is "excited" about growth in Europe and the UK in particular in 2010.

Speaking at the company's earnings conference yesterday (5 May), president and CEO Irwin Simon told analysts the firm expects to see a turnaround in the UK this year.

Hain has had a challenging few months in the UK. The company consolidated its food-to-go production at its Luton site after the loss of a Marks and Spencer contract at the plant but Simon said the group was winning other contracts.

"In our fresh business and daily bread business, we picked up a new customer with Tesco," Simon said. "If you look at opportunities on the fresh side of the business and look at where fresh can go with the economy turning around in the UK...we see a tremendous amount of opportunities and we look for our fresh business to be on a break even for next year."

He added: "The UK can be in a profitable position next year, and the management are doing a lot there to put us in that position."

For the three months to the end of March, Hain's group net income totalled US$2.7m, compared to a net loss of $41.2m in the same quarter last year.

However, net sales for the third quarter dropped to $222.1m compared to $234.6m a year earlier. The figure suffered a $24m dent due to inventory reductions at two major distributors and the phasing out of the fresh supply of sandwiches to M&S in the UK.

For fiscal 2010, Hain cut its EPS guidance to between $0.78 and $0.81 per share compared to a forecast given in February of $1.05 to $1.10.

Sales are now expected to reach $915m to $925m, a drop from the previously forecast $920m to $940m.

Simon, however, said he is "excited" about consumption trends in Europe, adding that further acquisitions may be on the cards.

"I'm pretty excited about consumption growth, growth in Europe and growth in the UK turning around. We have really managed our balance sheet well, which gives us the opportunity for other acquisitions," Simon said.

"Going into 2011, we have the right brands, we have the right products and I feel good at where we are."