Strong chilled fish sales helped boost turnover at Young’s Seafood to nearly £600m in 2013, with operating profits topping £20m.
In its latest financial results, published on Friday (28 March), the company reported a turnover of £582.7m for the 12 months to 30 September 2013, and operating profits of £20.4m. Young’s had a nine-month financial year in 2012 following changes to its accounting period, so its results are not directly comparable year on year – it reported turnover of £425m and operating profit of £7m for the nine months to the end of September 2012.
Leendert den Hollander, Young’s outgoing CEO, said turnover increased in 2013 thanks to strong chilled fish sales as well as a good run for Young’s Gastro brand of frozen fish meals, which was on course to become a £20m brand. It is currently worth £18.5m. “It’s still a challenging and tough market, but these results show our strategy of inspiring consumers to eat more fish is working,” he added.
While chilled fish – which accounts for roughly two-thirds of Young’s total business – had a strong 2013 overall, frozen fish had seen “a year of two halves”, with weaker performance offset by a recovery in the second half of the year, den Hollander said. To maintain growth in frozen, Young’s planned to ramp up support in the coming weeks and provide “new news for consumers” in the form of NPD such as its new Lightly Coated range of fish products.
Young’s was also keen to explore fish snacks and fish products targeted specifically at the lunchtime market, he added. “It’s not penetration but frequency of purchase that will drive up fish consumption, and fish is underutilised at lunch at the moment – we will continue to look at opportunities around that.”
Evolution, not revolution from new CEO
Young’s incoming CEO, James Hill (who is currently group CEO of Findus – a role he will continue to hold in addition to being Young’s CEO) said the market could expect “evolution, not revolution” from him. “Continuity would be a watch-word. Our results give me confidence that we have a good strategy, so I am essentially looking to continue this but perhaps drive it a little bit harder and a little bit faster.”
Hill echoed den Hollander’s view that lunchtime and snacking could provide interesting opportunities for future growth, adding Young’s also needed to work harder to appeal more to younger consumers. “I’m not sure we’re getting to the under-30s as much as we should,” he said.
Hill stressed both frozen and chilled fish would remain important to the Young’s business, but chilled was likely to be the clear growth driver. “Chilled will see disproportionate growth, I do believe that. Frozen has actually been more resilient during the downturn, but the supply chain in chilled is so outstanding now and chilled doesn’t have some of the challenges of frozen in terms of physical presentation and freshness perceptions. But frozen will remain important to us – we are a fish company and we want to span the temperature divide. If it swims, we want to sell it.”
Young’s portfolio in the UK includes the Findus brand, which was caught up in the horsemeat scandal last year. Despite this, there remained a “surprising amount of positive equity” in the brand in the UK, Hill said.
Asked about the impact of the current supermarket price wars on suppliers such as Young’s, Hill claimed he was relaxed. “I can bring lots of international perspective to this, and I can say the British retail sector is among the most efficient, profitable and innovative in the world. As for price wars – every year, there’s a price war. It’s fine. We will, of course, continue to push hard on our own cost structure, but we don’t see that as a problem.”
Young’s made bottom-line profits of £89.7m in 2013 compared with a £16.5m loss in 2012, helped by changes to simplify its corporate structure following its acquisition of Cumbrian Seafoods (now called Ocean Pure Limited). The company stressed these were “non-recurring and of a non-trading nature”.
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