William Jackson shrugged off “tough” market conditions to post a double-digit rise in annual sales, but profits were hit by £4m of restructuring costs during the year.
The Aunt Bessie’s and Abel & Cole owner posted a 14.2% jump in annual sales for the year to 30 April 2016, according to newly filed Companies House accounts.
This growth was partly due to additional frozen potato revenues in 2016, but the group still posted like-for-like growth of 1.4% which was slightly down from the 2.8% organic growth it achieved in the previous financial year.
Operating profits before exceptional items were up 3.2% to £18.2m, but more than £4m of exceptional costs during the year dragged pre-tax profit down 19.7% to £14.2m from £17.6m.
These charges largely related to the “difficult decision” to close the Gretna facility of its MyFresh prepared salad and vegetables business, which cost the business £2m. Restructuring at Abel & Cole incurred a charge of £0.5m.
Despite these charges, capital expenditure rose from £13.8m to £15m during the year “reflecting our ongoing commitment to growth and development of all of our business”. The group also bought a majority stake in The Food Doctor at the end of the year. The accounts reveal it paid £2.6m in cash for the business, with the deal worth a total £4.7m in the accounts when factoring in contingent payments, the assets acquired and liabilities assumed.
Total reported profit for the financial year rose by more than 50% from £9.5m to £14.7m due to a £5.2m improvement in its net defined benefit surplus, which had contracted by £4.6m in the previous year.
Writing in the accounts, chairman Nicholas Oughtred commented: “The year proved to be a challenging one. Economic conditions have continued to be demanding, with many areas of the food industry facing tough conditions.
It is therefore pleasing to not that the diversified nature of the group has enabled us to continue to grow our turnover whilst maintaining our profit performance”.
He added that challenges remained in the 2016/17 financial year, but the board “continues to believe that the opportunities for profitable growth outweigh the potential impact of the risks and uncertainties which face the group”.
The majority of the boost to sales stemmed from branded and own label goods supplied to retailers, which grew 48% to £112.6m during the year.
Ingredients and food service revenues edged up 2.8% to £130m, while consumer direct sales dropped 1.3% to £72.6m.
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