Produce Investments Swings To Profit, But Warns On Tough 2018 Start

LONDON (Alliance News) - Produce Investments PLC on Thursday swung to interim profit after the non-repeat of exceptional costs, though it cautioned on crop planting delays caused by poor weather conditions in the first three months of 2018.

The fresh potato and daffodil producer said revenue grew 1.6% to GBP80.6 million in the six months to the end of December from GBP79.3 million, while pretax profit came in at GBP2.1 million compared to a GBP1.0 million loss the prior year.

Administrative expenses fell slightly to GBP25.1 million from GBP25.3 million and there were no exceptional items in the period, compared with costs of GBP1.0 million the prior year.

Produce Investments increased its interim dividend by 2.0% to 2.49 pence from the 2.44 pence it paid the year before.

Chief Executive Officer Angus Armstrong said: "The first half of the year has seen a marked improvement in our profitability, driven by a combination of more collaborative relationships with our key retail partners, new business gains and the investment we have made in the business in recent years. Coupled with the benefit from increased volumes, we are pleased with the performance that we have delivered."

The company said its fresh potato business traded "very well" and delivered the largest tonnage recorded since 2011, at 6.0 million tonnes, representing a 15% increase year-on-year.

Seed potato sales were slower during the period but begun to regain momentum in the second half to date, Produce Investments said.

The group also highlighted its early planting in Cornwall has been severely delayed by the very wet conditions experienced in the early part of 2018.

Similarly, in Jersey, planting of Jersey Royals is now significantly behind plan because of very wet ground in January and early February, and freezing conditions in late February and early March.

Despite that, the company said it remains confident of a good season and expects underlying trading profit for the full-year to be broadly in line with its expectations.

"The recent poor weather has resulted in a delay to the start of the planting season in both Jersey and Rowe however, the board currently expects underlying trading profit for the full year to be broadly in line with its expectations," Armstrong added.

Produce Investments shares were trading down 2.2% at 159.00 pence per share on Thursday.