Pom Bear crisp maker Intersnack has said it will bounce back into profitability next year after a tough trading time saw it post losses of £4.3m and withdraw loss-making products.
Founded in 1968, Intersnack makes a series of savoury products from its Tanfield Lea base including Pom Bear crisps and Penn State snacks and it has expanded significantly since 2009 through organic growth and acquisition.
A wholly owned subsidiary of Netherlands-based Intersnack International BV, the firm also has manufacturing sites at Corby and Haverhill.
The expansion has resulted in a huge lift in sales from £43.6m in 2009 to £80.1m for the year ended December 2012, although year-on-year sales fell by £1.4m between 2011 and 2012, a drop the firm attributes to restricted margins and a rise in the cost of raw materials.
A pre-tax loss of £4.3m was also posted in the County Durham company’s annual accounts.
However, the gap was closed from the previous year’s pre-tax loss of £7.5m by 38%, and the directors’ report details how the business has carried out a review of its activities, as part of a plan it is implementing to get back into profit, including withdrawing some products which weren’t making money and by making redundancies through a restructuring of certain departments.
The directors’ report reveals the restructuring exercise cost the business £618,000 but has led to the streamlining of several areas of the business.
Average headcount for the firm 385 people last year, down from the 419 employees with the business in 2011, and accounts show redundancies led to reductions in two departments, with 21 fewer staff working in production by the year end and 12 less working in selling and distribution.
The office and management departments were, however, strengthened by five to 29, as part of the restructuring process.
The directors said: “The results for the year reflect difficult trading conditions for the company’s products, in particular the restricted margins and increased raw material costs.
“The company has made some progress during the year in improving its performance. It has achieved small improvements in margins by withdrawing certain loss making products. It has also strengthened its management team.
“During the year its activities have been restructured to more closely integrate the constituent businesses and established a single central services function covering finance, marketing, purchasing and sales for the whole group.
“This should result in improved efficiencies and costs savings following the restructuring of the management and support teams just prior to the year end.
“The directors expect further improvements during 2013 before the company trades profitably the following year as the business realises the full benefits from its plan.”