Uniq stresses underlying growth
sandwiches in the first half for Uniq. Reported sales were slightly
lower than last year due to the residual effects of disposals, but
the company's restructuring efforts should really bear fruit in the
second half.
Uniq, the prepared food group which used to be the Unigate dairy company, has reported growth in sales and profits from continuing operations for the first half of 2003 as it focuses its business on a handful of core products and markets.
Sales from ongoing operations were 10 per cent higher at £470.9 million in the 26 weeks to 27 September 2003, although turnover fell by around 5 per cent in actual terms as a result of a number of disposals (Uniqsauces and St Ivel spreads and yoghurts) since the fist half of 2002.
Operating profit showed a similar pattern, rising 65 per cent to £17.2 million on an ongoing basis but dropping 55 per cent in actual terms.
Bill Ronald, chief executive of the salads, sandwiches, ready meals and desserts group, said that the good performance had come despite increasing competition in the markets served by the group, but stressed that the level of improvement in the first half was not sustainable in the second.
Turnover in the UK was 5 per cent ahead of the previous year at £188.1 million, although it would have been 10 per cent higher if not for a poor performance from the poultry operations there, the company said.
Sandwiches and salads saw a 12 per cent rise in sales, helped by capacity increases and new supply contracts, while the desserts business also had a strong period, with sales up 8 per cent.
The UK meal solutions arm had a disappointing first half, however, with sales in the poultry business down 18 per cent due in large part to the discontinuation of a supply agreement with Burger King.
In southern Europe (France and Spain), sales were 1 per cent higher than in 2002 at £126.2 million, excluding currency and disposals. The first fruits of a major overhaul of the group's manufacturing and purchasing functions, and its product portfolio, are beginning to be seen, the company said, while further new product launches should sustain the growth in the second half.
The spreads business in France (St Hubert and Le Fleurier brands) continued to benefit from the growth in the health segment, which grew at 27 per cent in the first half, and sales were 12 per cent ahead of last year. The second half will see the extension of the Benecol-based ilo brand into yogurts, giving a further boost to sales.
In contrast, the Marie frozen food division's performance was disappointing, with both industrial action and the hot summer weather pushing down sales by 6 per cent. Chilled ready meals were also impacted by the hot weather although new product launches and increased marketing expenditure meant that sales were ahead by 4 per cent.
In Spain, where the group operates under the Andros name, sales were 22 per cent ahead of the prior year, due principally to new sandwich supply contracts and the relaunch of the McSalad brand.
The northern European division, which supplies a range of countries from production bases in Germany, Denmark and Belgium, posted sales of £156.6 million, excluding currency and disposals, driven mainly by solid sales growth in Germany, where the hot weather boosted salad sales by 7 per cent.
Benelux salad sales were also 7 per cent ahead of last year due partly to the positive impact of the hot weather, but sales in Scandinavia were down 3 per cent as a result of a change in the company's distribution there.
Sandwiches sales were down by 15 per cent, in line with expectations, as the company exited the German market. Excluding Germany, the remaining sandwich business saw growth of 14 per cent due principally to new contracts in Belgium.
