A ready-meal business sold twice in little over a year has seen like-for-like sales drop by 17.1% after switching its focus from making cheaper, high volume products to a lower volume of more expensive meals under its new ownership.
Consett-based International Cuisine - bought by Greencore for £16.7m last August - posted accounts at Companies House which show it accrued sales of £56.1m for March 26, 2011 to the end of June 2012, a monthly average of £3.74m.
That compares to £54.2m for the year ended March 25, 2011, a monthly average of £4.51m.
In a report lodged at Companies House, the directors said on a like-for-like basis the company had experienced a 17.1% reduction in turnover, a result of the business focusing on lower volume, higher margin product lines. It also stopped supplying its high volume, low margin range which it said “proved challenging from a management and planning perspective.”
Despite the drop, directors said they believe the company is well placed to take advantage of future opportunities, although noted the price of ingredients is rising.
The report said: “In common with most producers in the company’s market, revenues are concentrated with a small number of large customers and the loss of any one could significantly reduce revenues and profitability in the short term. The business looks to address this risk by ensuring it continues to offer a high standard of account management to its customer base, which includes building cross-functional relationships.”
Pre-tax profits dropped from £2.34m to a loss of £337,000, although most of the change was down to £1.36m in tax the firm had been hoping to reclaim against losses of an overseas subsidiary, but which directors said was no longer likely to be forthcoming. Staff numbers were reduced by 16 though overall wages for the firm’s 549 workers jumped to more than £13m.
The Journal reported last August how International Cuisine was sold twice inside a year, with Irish convenience firm Greencore buying out the firm, based on the Hownsgill Industrial Park, for £16.7m. The acquisition came after US-based Hain Celestial Group put the firm up for sale less than a year after it bought the company in October 2011. The Consett site provides capacity for Greencore in the ready-meals category in the UK, which continues to show strong growth, reporting an annual turnover of £1.1bn.
Revenues are concentrated with a small number of large customers