UK confectionery and snack foods group Zetar saw first-half profits drop 73% despite an increase in sales, as rising costs and the closure of UK retailer Woolworths took their toll.
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Zetar’s first-half pre-tax profits totalled GBP434,000 (US$605,922), down from GBP1.69m a year earlier, the company revealed in a trading update today (20 January).
Zetar said profits were hit by the closure of Woolworths – one of its major retail customers – costing the group annual sales of GBP3.5m.
In the absence of clearer guidance from Woolworths’ administrators, Zetar said that it has made a full exceptional provision against outstanding debt of approximately GBP0.9m.
The group also indicated that it was in talks to sell its loss-making baked snack division in order to increase focus on its confectionery and natural and premium snacks businesses.
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By GlobalDataSales from continuing operations, excluding the baked snacks unit, rose to GBP53.6m from GBP47.8m in the previous first half.
“The first half of the year proved very challenging for the group. However, whilst we acknowledge that conditions are likely to remain tough, we remain confident in the robustness of the group’s core businesses and believe that actions taken and planned will enable the group to renew its track record of profit growth next year,” chief executive Ian Blackburn said.
The company also revealed that its finance director, Dale Mullins, will leave Zetar by mutual consent. Blackburn will take on Mullins’ responsibilities alongside his current role as CEO.
