(Alliance News) - Norish PLC on Thursday reported lower half-year profit as sales from its sourcing and temperature controlled divisions both declined.
The cold-storage warehousing and logistics firm, headquartered in Suffolk, reported a GP779,000 pretax profit for the six months ended June 30, a 40% decline from its GBP1.3 million profit the year before.
This was primarily the result of a 9.1% revenue decline to GBP15.9 million from GBP17.5 million. This included a 14% drop in sales at its sourcing division to GBP8.4 million, while sales in its temperature-controlled division slipped 2.7%.
The company said its "investment in dairy is moving from the development to commercial phase" with its Grass to Milk Co subsidiary continuing its plan with its first A2 protein-based product in the final development stages. It plans to launch in high-value export markets by the end of 2020.
"The business has built considerable technical and commercial expertise to support a successful product launch and is engaging with a strong in-market commercial partner. We believe the business is well placed to add value to our unique grass-fed A2-protein milk supply," said Norish.
Canwell's Court Farm operating performance was as expected. Milk revenue was up 3% year-on-year, but the dairy division as a whole suffered in terms of performance due to incurring a GBP100,000 in cost for converting to an A2 herd. A2 milk does not contain the protein A1, having mostly the A2 form instead.
Norish said: "We are happy with the significant progress made with the development of our A2 protein milk supply via Cantwell's Court Farm. Grass to Milk Co remains on track to launch its first A2 protein-based product before year end, using our unique milk source.
"The fallout in the UK food service market has afforded Town View Foods, our protein trading subsidiary, the opportunity to increase our trading network and rebuild our business. With an eye to opportunities post Brexit, we are now extending our footprint to South America on a minimal cost basis.
"We believe our balance sheet strength affords us opportunity in the current environment, vis a vis many of our competitors in the sector."
As in 2019, no interim dividend was recommended.
Shares in Norish were down 2.1% at 70.00 pence in London on Thursday afternoon.
By Anna Farley; annafarley@alliancenews.com
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