Greenvale potatoes

Greenvale Potatoes owner Produce Investments is looking to diversify from its core daffodil and potato markets into other vegetable categories, CEO Angus Armstrong has confirmed.

Speaking as the group announced its full-year results today (30 September), Armstrong said the supplier remained acquisitive and was looking to broaden its offering.

“The acquisitions need to be the right ones, we’re in dialogue, and we continue to look to diversify the group,” Armstrong said. “Potatoes and daffodils are our core focuses at the moment, but our acquisition strategy hopefully will take us into a broader range of product mix.”

Produce Investments shrugged off a challenging 2015 - which saw it hit by a major product recall and close its Kent Potato Company subsidiary - to deliver an increase in operating profit of 14% for the year to 25 June, to £9.21m.

However, the business was hit with exceptional costs amounting to £4.63m, relating to the impairment and closure of the Kent Potato Company’s packing site, and charges regarding to the product recall at its Swancote Foods business.

The business delivered a “robust performance”, Armstrong said, with a continued focus on operational efficiencies improving man hours per tonne by more than 8%.

“We’re positive about our business model after some difficult times last year,” he added. “Although market conditions remained challenging, during the year we saw a notable improvement with greater retail stability in both volume and value. By working with one of our core retail customers we have been able to create a supply chain model more closely aligned to prevailing market conditions and which mitigates against the impact of any market fluctuations.”

Customers were now “back on side” after the Swancote recall - which saw Produce investments initiate a major withdrawal of about 45 own-label ready meals and salad dish lines sold by Tesco and Sainsbury’s due to fears of metal contamination at the Telford-based supplier’s factory.

“It probably took us longer than we hoped to sort things out, and we still have some work to do with one customer, but we’ve had some new business wins in recent months and Swancote is on a much more positive trajectory now.”

Armstrong added that the Brexit vote had not had a material effect on the business. However, Produce Investments continued to “monitor the situation closely as a significant proportion of our workforce originates from outside of the UK”, he said.

“There will be a bigger drive towards automation in the produce sector over the coming years, but we will still be reliant on migrant labour and the government has to be very conscious of this ahead of negotiations,” he warned.

Produce Investments has also made two new appointments to its board. Fmcg veteran Neil Davidson - a former CEO of Arla Foods and current non-executive director of Morrisons - has been appointed chairman, replacing Barrie Clapham, who is standing down after a decade. Finance director Brian Macdonald will also leave the board in December to be replaced by Jonathan Lamont.