UK convenience food group Uniq has said that it has won new business in the UK during the first half, but that market conditions in the UK and Northern Europe remain challenging.

During the last six months, Uniq said it has won new business with annualised sales of more than £20m (US$35.7m), mostly in the UK. The company said the new business will largely replace the business lost in the UK in the second half of the last financial year, the impact of which is the primary reason why continuing sales at constant currency are, as anticipated, down 3% compared with strong results in the first five months last year. 

Uniq said that across the group it has continued its efforts to lower costs and has had further success in reducing purchasing and manufacturing costs although these have not been sufficient to sustain the level of profitability achieved in a strong first half last year.

In Southern Europe, Uniq said strong sales growth in the spreads/health and chilled sectors is more than offsetting the decline of frozen sales, with sales for the first five months 1% ahead of the same period last year.

In Northern Europe, Uniq's cost reduction programme is starting to show benefits with the rationalisation of two small sites in the last five months and the project to transfer fish production to Poland on schedule and budget. Sales fell 9% for the first five months, compared to the year-ago period, reflecting the company's exit from its loss-making sandwich business in Germany, lower raw material costs for fish and a change in weather patterns.

In the company's prepared foods business, Uniq said it has begun the integration of the Minsterley desserts business. Uniq said the closure of the Devizes facility in October 2004 has been announced following the transfer of key business to Northampton. Additionally, the prepared foods division has won around £20m of annualised new sales in desserts, salads and sandwiches with the only business lost being related to the closure of Devizes. Sales for the first five months were 12% down on last year (excluding acquisitions) largely due to known business losses but including weaker than expected summer sales.

"The performance in the first five months was in line with our budget in what was a difficult period. Our results traditionally have a strong second-half weighting and our new business wins are encouraging. However, the UK and Northern Europe markets remain very challenging," the company concluded.