Patties Foods announces financial year results

Australian frozen food company, Patties Foods Limited announced the company’s financial results for the year ended 30 June 2013.

The company recorded a 75.4 percent drop in net profit after tax (NPAT) due to a non-cash impairment charge of $11.8m against the Frozen Fruit intangible assets, resulting in an end of year profit of $4.8m.

The company says that the underlying NPAT of $17.0 is in line with the board’s earnings update which was reported to the Australian Stock Exchange on 28 June, 2013.

Chairman of Patties Foods, Mark Smith said that the company continued to grow during the period despite challenging economic conditions.

 “The market leading branded savoury business continued growth in FY13 in challenging trading conditions. We remain focused on our strategy of supporting and growing our core brands through innovative new products, marketing campaigns and channel development.

“In June this year we announced a strategic review of our frozen fruit business which is continuing. Alongside this review our periodic impairment testing process has resulted in the board recording an impairment of $11.8m in the value of the intangible assets of the frozen fruit business.”

Managing director, Greg Bourke said that 2013 marked the first time in four years that the company recorded a drop in earnings.

 “Market conditions remain difficult and for the first time in 4 years, we have reported a decline in earnings. However, the core business of savoury brands continues to underpin the performance of the company,” he said.

“Volumes continue to grow strongly although incremental revenue was achieved at lower margins due to increased discounting levels, particularly in the In-Home (supermarket) channel.

“Our manufacturing result was disappointing as we did not meet our own high standards when commissioning the automated pie packing plant, despite other parts of the bakery performing well with good improvements in efficiencies.”

Throughout the financial period, Patties Foods enjoyed increased market share in In Home and Out of Home savoury categories and strong growth of the Four’N Twenty and Patties brands.

Patties say that they remain committed to driving earnings growth from underlying earnings in 2013 and building shareholder value through strategic growth initiatives, supporting core brands, achieving price increases and improving manufacturing efficiencies.


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