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The flooding in Cumbria that closed United Biscuits’ Carlisle factory for four months after 2015’s Storm Desmond hit the Pladis-owned firm’s annual sales and profits, newly filed accounts have revealed.
Overall turnover of United Biscuits (UK) dropped 3.9% to £868.2m. Domestic sales fell by 5.4% in the year to 31 December 2016 to £727.6m, though this was partially mitigated by a 4.9% growth in exports to non-UK territories to £140.6m.
“The factory flood caused by Storm Desmond had a huge impact on the production of everyday biscuits,” Pladis told The Grocer. “The factory was closed for four months.”
The disruption led to a 12.4% drop in operating profits to £107.3m, while pre-tax profits dropped from £105.4m to £92m.
Adjusted EBITDA slipped slightly from £160.1m to £1509m, though EBITDA margins grew by 0.6 percentage points driven by cost savings and insurance payments related to the flooding.
The accounts show it received an insurance payout of £19.8m during the year for the factory clean-up and repair on top of the £3.6m booked in the 2015 accounts.
Morning Update
Barry Williams has been promoted to managing director of Poundland UK and Ireland, The Grocer can reveal.
Williams joined the discounter in February having left Asda, where he was chief customer officer, a year earlier.
Poundland executive chairman Andy Bond is moving to a wider strategic role as chairman of the retailer’s owner Pepkor Europe, which is part of Steinhoff Group.
It is understood Bond felt Poundland needed its own direct leadership and had been impressed with the job Williams has been doing.Williams officially takes up his new role on 1 October and will assume responsibility for distribution and retail as well as trading.
He told The Grocer he was confident Poundland could continue to prosper having returned to like-for-like growth at the start of 2017 for the first time in two years, with the latest quarter showing 2.5% L4L growth versus –6% as recently as 12 months ago.
“I’m very excited by the opportunities out there,” he said. “We have made a lot of improvements but there is a lot more to go after.”
Yesterday in the city
The FTSE 100 edged down just 0.1% to 7,263.9pts yesterday but it was a far tougher day for retail and fmcg stocks as worries over consumer spending resurfaced.
Sainsbury’s (SBRY) in particular had a tough day with its shares falling by 4.05% to 234.30p while Ocado’s (OCDC) share price dipped 1.79% to 285.00p.
Meanwhile news that Compass Group (CPG) CEO Richard Cousins is to step down next year resulted in a 2.54% slide it the catering giant’s share price which fell to 1571.00p.
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