In its financial results for the year ending June 30, 2015, Patties Foods Ltd revealed a net profit after tax of $2.1 million versus $16.7 million in FY14, with the result significantly affected by the frozen berries recall and the consequent impairment of its frozen fruit business.
Commenting on the results, Chairman Mark Smith said the frozen berries recall had a significant impact on the business and is the primary reason for the approximate $14.6 million reduction in net profit after tax compared with the previous year.
Despite this challenge, total company revenue grew by 3.7 per cent, indicating that the savoury business performed solidly, with all core brands growing revenue and profit.
“This positive result was driven by more effective marketing, product and manufacturing innovation, channel focus and expense control,” Mr Smith said.
Also faced with substantial increases in beef prices, Managing Director and CEO Steven Chaur said that, despite these pressures, the company has proactively worked to help mitigate any long-term effects and focuses on driving its core savoury business, which continues to perform solidly and has gained profitable market share in all key sales channels.
During the year, the company pursued its three-stage rebuilding program. Under the first, the ‘Restore Basic Operating Conditions’ stage, a major company reorganisation delivered in excess of $3 million in overhead savings and a further $2.8 million in operational and purchasing savings to help offset the significant impact in beef costs.
Patties Foods’ core brands also grew in sales revenue versus the year prior with Four’N Twenty (up 5.1 per cent), Patties (7.6 per cent), Herbert Adams (11 per cent) and Nanna’s sweet pastry products (19 per cent).
In the in-home channel, Patties Foods grew at 7.6 per cent in sales revenue, with all of its core savoury brands increasing in market share, assisted by improved shelf ranging and promotional effectiveness.
Successful launches included installing the latest new sous vide (or slow cooked) technology for its Herbert Adams Slow Cooked and Four’N Twenty Real Chunky ranges, placing the company at the forefront of innovation in its category.
“Over the coming 12 months, our strategy remains focused on delivering profitable growth, expanding our savoury business, continuing to optimise our cost base and delivering further efficiency gains from our Bairnsdale bakery,” Mr Chaur said.