Patties records 21 per cent profit drop on back of margin cuts
The maker of the Four n’ Twenty pie has today announced a 21.3 per cent decline in profit despite seeing sales up by 9.3 per cent in the 2008/09 Financial Year.
Patties Foods advised that the main catalysts for the “disappointing” result were difficulties in completing commissioning of the new bakery plant in the first half – which led to reduced customer supply levels and higher costs; increased marketing spend to “regain market share and shelf presence”; and higher fruit costs.
“The manufacturing inefficiencies have been remedied with plant performance gaining momentum through the second half to firstly restore and then improve on previous plant efficiency levels,” the company said in a statement. “This improvement has been achieved by optimising the new equipment and introduction of a Continuous Improvement program across the Bairnsdale plant. The fourth quarter has shown increased output rates, reduced waste and improved labour efficiencies.”
The manufacturer saw the future in a positive light following the signing of a major contract in the petrol and convenience channel, improved manufacturing efficiency and a warm response by customers to some of their new product launches this year – namely the extended Four n’ Twenty Hungry Man range, Nanna’s fruit pie range, and Wedgwood and Snowy River ranges of savoury value products.
“The company now has state-of-the-art production capability to meet increasing consumer demand for savoury and dessert products,” Patties added. “The new management team has already successfully increased the focus on operational excellence, which has driven improved production performance during the second half of FY2009.”
“With the expected continuing improvement in factory efficiencies, the branded In-Home segment and the Davies bakery business, the continuing growth of the Out-of-Home business and reduced interest expense, we look forward to an improved trading result in FY2010.”