Free-buy potato prices are likely to remain on par with contracted prices, claims Produce Investments.
The firm, which is the parent company of tattie giant Greenvale, said it expected a more balanced potato market this season as a result of supply being better aligned to demand.
The comments came as the company released its final accounts for the year ended June 25, 2016.
Chief executive Angus Armstrong said the group had delivered a “robust performance” in the year.
“Although market conditions remained challenging, during the year we saw a notable improvement with greater retail stability in both volume and value,” said Mr Armstrong.
“In the 52 weeks to the end of June 2016, value declined by 1% against a decline of 14.5% in the prior year, and volume increased by 0.9% up from 0.3% in 2015.”
Turnover at the firm, which has a packhouse at Duns and a seed office at Burrelton, Perthshire, was up 3.7% to £185.102million, from £178.443million previously.
However pre-tax profits were down by more than 50% to £3.496million from £7.263million in the year before. During the year the company incurred exceptional charges amounting to £4.63million following the closure of its packing site in Kent and a product recall at its Swancote Foods division.
Mr Armstrong said the company had secured a three-year contract with a major retailer, and although it had resulted in a reduction in volumes it would help reduce the impact of crop value fluctuations on the company’s performance.
On the current season, he said: “The growing conditions experienced so far, with a wet and late spring followed by reasonable summer temperatures, would point to an average quality crop and yield. Estimates for the planted area of potatoes would indicate an increase of 4.3% compared to last year.
“While it is still early in the season and therefore difficult to make predictions, we would expect prices for non-contracted free-buy potatoes to be in line with those that have been contracted.”
Chairman Barrie Clapham added that the company did not envisage any major impact from Brexit in the short-term.
“Although we continue to monitor the situation closely as a significant proportion of our workforce originates from outside of the UK,” added Mr Clapham.
