Patties returns to profit growth

Patties returns to profit growth

Australian pie maker Patties Foods said that it saw profits return to growth in the second half of the year as investments in brand building and productivity began to pay off.

The company reported a 0.2% drop in EBITDA for the 12 months to 30 June, with second-half gains offsetting a weaker first-half performance.

Full-year EBIT and net profit after tax jumped Patties cycled charges related to the write-down of bad debt and impairment of its frozen fruit business in the prior year.

However, on an underlying basis, EBIT fell 3.4% to A$26m (US$24.3m), with underlying net profit down 2% to A$16.7m.

Nevertheless, chairman Mark Smith said: "It is pleasing to see a return to profit growth in 2H14 as we see the early benefits of investing in branded growth initiatives and innovation, with continued focus on productivity improvements including effective cost control."

Sales increased 1.2% to A$247.7m, despite the loss of a "major" private-label fruit contract. Innovation and marketing supported branded sales, with revenue from the Patties brand up 21% in the supermarket channel.

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