Sales at ready meal supplier The Authentic Food Company have jumped 20% to close in on £50m following the acquisition of a frozen factory in Ireland from Heinz, but profits took a hit as the group invested in the site.
The manufacturer, which supplies Iceland, Morrisons and Asda as well as foodservice customers, said in newly filed accounts the year to 31 May 2015 had been “transformational”.
Pre-tax profits fell 32.8% to £1.2m despite sales rising to £49.1m as Authentic invested in the Dundalk site bought from Heinz in January 2015.
Authentic said the investment programme had helped secure several long-term contracts set to be launched by spring 2016.
Since the year end, the site has been fully integrated into the wider business, and MD Nik Basran said in the accounts the group had begun to capitalise on the opportunity to broaden its product range.
Sales growth is expected to continue at the same rate in the current year, with at least another 20% added to the top line.
Basran added the deal had positioned Authentic to be the leading supplier of frozen world foods in Europe by 2020, with a production footprint capable of delivering £150m of sales across the foodservice and retail sectors.
The deal included a three-year co-pack arrangement for Authentic to continue to manufacture Heinz’s range of WeightWatchers frozen meals, as well as exploring new opportunities for Kraft Heinz in the category.
“The performance of the company is in line with management expectations in what has been a transformational year for the group as a whole, that has required planned significant investment, in both infrastructure and people, as the group entered a period of unprecedented accelerated growth,” Basran said.
Authentic has also invested heavily more generally in new product development and has signed up the Yu family, who won Gordon Ramsay’s best Chinese restaurant in the UK in 2010, and former Michelin-starred chef Paul Heathcote to develop ranges of pan-Asian, British and Italian meals.