Pre-exceptional EBITDA fell 5.2% to £40.2m in the year to 3 April, the UK's biggest wholesaler said, while turnover inched up 0.2% to £4.24bn. Tobacco sales rose 0.8% to £3.2bn during the period, with non-tobacco sales down 1.8% to £1bn.
Profits had slipped because P&H had invested heavily in reorganising the business into four channels distribution, multiples, independents and wholesale said Peter Austen, managing director of commercial. This investment included £7.1m in the launch of its van sales business Sweetdirect, creating 100 jobs, as well as a new sales force for its symbol fascia Mace, which created 27.
P&H also blamed the dip on the impact of the recession on the forecourt and off-licence sectors, in which P&H has a significant market presence. P&H lost contracts with off-licence chains First Quench Retailing and Wine Cellar when they went into administration last year.
"The strength of P&H is that we can take broad, diverse changes without any bottom line hiccups," said Austen. "It shows just how resilient we are."
Driving down debt had been key for the business during the year, he added. Bank debt, built up following a management buy-out in February 2008, had been reduced by £70.2m to £131.2m.
PalMak, P&H's buying alliance with Makro formed in May this year, was progressing well and contracts with two-thirds of the 37 suppliers targeted in the first phase of the alliance were being negotiated, said Austen.
Trading for the new financial year was currently in line with expectations, added CEO Chris Etherington. "While the anticipated cutbacks in public services and increases in taxation are likely to result in higher unemployment and reduced consumer spending, we believe the diversity of our business works to our advantage."