The parent company of tattie giant Greenvale – Produce Investments – plunged into the red in the second half of 2015.
In its interim accounts for the 26 weeks to December 26, 2015, the firm revealed a pre-tax loss of £198,000, compared with a pre-tax profit of £1.948million for the same period in 2014.
The firm, which has a packhouse at Duns and a seed office at Burrelton, Perthshire, posted a 2.8% decrease in turnover for the period to £78.531million, from £80.757million previously.
Sales to the UK fell slightly to £74.636million, while sales to Europe increased to £1.451million from £1.321million previously.
Chief executive Angus Armstrong hailed a “very satisfactory improvement in operating profits” which rose to £3.43million from £2.51million the year before.
“The 2015 crop has yielded 5.4million tonnes compared to 5.74million tonnes in 2014 and 5.58million tonnes in 2013. This is a direct result from the required reduction in area planted, which was down 6.6% compared to last year,” said Mr Armstrong.
“As a consequence of this reduction in production, supply and demand are more balanced. Whilst the retail markets will always remain challenging, they have been relatively stable in terms of both volume and value, compared to recent years. Both of these factors, along with closer alignment to the prevailing market conditions with one of our core customers has resulted in an improvement in performance for the first six months of the year.”
He said the closure of the firm’s packing facility in Kent in November last year resulted in one-off costs of £2.79million, and said a contamination at its Swancote Foods division was likely to cost the firm between £300,000 and £1.5million.
The contamination issue, which resulted in product recalls, was blamed alongside lower prices being paid for raw materials for the slight drop in sales.
Looking to the future, the company’s non-executive chairman, Barrie Clapham, said: “Early indications point to the planted area for the 2016 growing season being at a similar level to that of 2015. I am pleased to report that at the time of writing the volume performance of fresh potato sales is relatively stable, which is a big improvement over the last couple of years, though the retail environment will no doubt remain as challenging as ever.”
