Divine Chocolate, the UK-based Fairtrade chocolate maker, has reported a loss in its most recent annual accounts due, in part, to a product recall.
For the year to 30 September, Divine posted a net loss of GBP183,621 (US$297,240), compared to a net profit of GBP130,248 a year earlier.
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During the year, Divine recalled a batch of chocolate after advice from the UK’s Food Standards Agency on the labelling of milk traces in one of the company’s bars. The cost of the recall was GBP168,513.
Before the cost of the recall is included, Divine made an operating profit of GBP22,286, down from the GBP276,353 filed a year earlier.
Divine’s turnover fell 11.5% to GBP10.4m due to the recall and the loss of what chair Patrick Fleming called the loss of a “major” own-label contract.
Fleming said rising commodity costs and “volatile” exchanges rates had created a “difficult economic environment”.
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By GlobalDataHowever, he pointed to a 23% rise in exports and said Divine had started the subsequent financial year with a “strong new product pipeline”.
Fleming added: “We are cautiously optimistic about the prospects for 2011 and we are building our management capacity to take the business to a much higher level of turnover and profitability.”
