UK revenues at pizza and home baking supplier Dr Oetker edged up to £156m last year, but profits jumped by two-thirds driven by operational efficiencies and the accounting treatment of previous acquisitions.
Total sales in the UK arm were up 0.7% in the year to 31 December 2015 to £155.9m, but pre-tax profits rose 64% to £25m from £15.3m as the cost of sales and administrative expenses fell.
Cost of sales during the year dropped 7.9% to £95.2m and admin expenses fell 18% to £12.4m.
The company stated that it “continues to invest heavily in the manufacturing facilities in the North-West of England, while driving operational efficiencies throughout our business in order to respond and adapt to challenging market conditions”.
Dr Oetker added that a significant factor in the profit reported is the amortisation of goodwill created on the acquisition of Supercook UK and Schwan’s Consumer Brands UK in 2007 and 2009 respectively, which both fully amortised in 2014.
Peter Franks, MD, frozen & foodservice, added: “The business increased turnover from £155m in 2014 to £156m in ‘highly competitive’ markets in the UK, where there had been an increased focus on own label products in the major supermarkets to combat the growing challenge from discounters.
“We remain absolutely committed to the UK market and have continued to invest heavily in our brands in three core business areas – frozen pizza, home-baking and foodservice.”
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