Canterbury loses £2.4m
Article Date: Apr 20 2005Continuing restructuring costs helped keep Canterbury Foods, a leading supplier of sausages, beefburgers and pastry products to the food service market, in the red to the tune of £2.4 million last year, £600,000 less than in 2003, while the company claims to be 'ahead of our three-year rationalisation programme'. Robert Tyerman reports.
Turnover at Hull-based Canterbury slipped by nearly £900,000, reflecting the AIM-quoted company's withdrawal from certain lines of business, such as meat trading, while restructuring cost nearly £1.4 million, which reflected a factory closure at Hackney and the moving of sausage production to Hull. Before reorganisation costs and goodwill amortisation, Canterbury turned a £1 million loss into a £295,000 profit.
In what chairman Christian Williams describes as 'a tough year', the company had to contend with rising beef and pork costs and burgers suffered from intense competition. However, in the areas seen by directors as offering higher and more sustainable margins, food ingredients and pastry products volume rose seven per cent and sausages volume grew 21 per cent.
Canterbury, which raised £6 million at 30p a year ago, reduced overall debt by £3.2 million in 2004 to £5.4 million, including a £5 million overdraft (up by £1.7 million). Chief executive Paul Ainsworth says the placing proceeds enabled the company to invest £1.7 million into its Hull factory to move frozen sausage production there from Hackney, with £770,000 spent on boosting output there, buying adjacent land and buying a new pastry chilling facility.
An upbeat Williams declares 'Canterbury Foods is already a very different company from that inherited by current management some 18 months ago. We have come a long way and are in sight of our three-year goals.'
Floated in autumn 2003 at 32.5p, Canterbury's shares now trade at 27p, down 1.5p this morning. No dividend is proposed and the shares look a long-term punt.
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