UK-based convenience food group Uniq warned today (8 October) that it expects to make a loss for the second half of the year.
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The company blamed a “significant deterioration” in economic conditions since it last updated the market in July. That month, Uniq posted a first-half pre-tax loss of GBP4.2m (US$7.27m).
In an update this morning, Uniq said customers had been trading down, which had led to a “disappointing margin performance”.
“We expect the negative market trends to continue and, as a consequence, the board now anticipate that the group will incur a trading loss in the second half as a whole,” Uniq said.
Third-quarter sales were line with last year, Uniq said. UK sales grew by 1.7%, an improvement from the growth of 0.5% seen in the first half of the year.
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By GlobalDataHowever, Uniq said its UK sandwich sales had “slowed significantly” during the third quarter. Sales growth in the category reached 2.1%, down from the 13.2% Uniq enjoyed in the first half.
The company said its UK desserts sales had “stabilised” but “at a cost to margin”. The need to drive volumes through price discounts had offset the price increases Uniq had implemented during the quarter, the group said.
“Despite these pressures we expect the UK to deliver a trading profit in the second half, albeit at a much lower level than last year, and still dependent on Christmas,” the company added.
Sales in France tumbled 6.8% thanks to a fall in branded sales, which hurt margins in the market, Uniq said.
Uniq’s sales in northern Europe rose 4.2% during the third quarter, thanks to its business in Poland, were sales jumped 24.4%.
Salad sales in the Netherlands were flat after falling 9.7% during the first half of the year.
However, Uniq’s sales in Germany dipped 2% after a flat first half due to a “weak” fish market, the company said.
Nevertheless, the improvement in the Netherlands means Uniq expects its second-half performance in northern Europe to be better than last year.
