UK frozen and chilled foods producer Strathmore Foods has booked a drop in full-year profits, hurt by rising ingredients costs.
For the 12 months to the end of June, net profits slumped 42.3% to GBP185,093 (US$292,924). Operating profits in the period slid 28.5% to GBP413,550.
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Sales for the year, however, amounted to GBP11.6m, a 3% improvement on the prior year.
Strathmore said a product rationalisation programme to eliminate some “poorer margin products” during the year resulted in a reduction in the turnover in the frozen food part of the business.
The company, however, said it was pleased with the development of its McIntosh brand, which increased its market share in the chilled pastry market, but higher sales were offset by large increases in commodity prices.
“[This] caused the price of many of the company’s raw material inputs to increase greatly within very short timescales. These increases led to pressure on the company’s margins as customers were reluctant to agree to price increases,” the company said.
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By GlobalData
