Ice cream industry sees sunny times ahead
solid start to the year, improving profits during the flat winter
Richmond Foods, the UK-based ice cream company, has ended the first half of the current fiscal year in bullish mood.
While sales for the half were marginally lower than in the same period a year earlier, operating profits were three times higher than in 2002 and pre-tax losses were substantially reduced. A performance of which the company is proud, coming as it did in the winter months when ice cream sales are traditionally at their lowest.
The company reported a 0.6 per cent drop in turnover for the first half of the year to £42.2 million (€58.8m), but operating profits were 245 per cent higher at £723,000. Pre-tax losses were 72.4 per cent lower at £199,000.
The steady improvement came as a result of a number of measures introduced by Richmond Foods during the last few years. The company's soft ice cream business, now trading under the Nestlé Ice Creamery brand, continued to expand, and Richmond improved its share of the impulse market to 26.4 per cent - the only leading company to gain during a quarter marked by a decline in the market as a whole, in part due to the late Easter period.
Continued investment (£25 million over three years) in innovation and operating facilities should help lift the company's performance in the second half, as will the listing of a number of new branded and own label products.
Ross Warburton, chairman of Richmond Foods, said: "Our drive for growth in the second half of the year is to maintain market leadership in bulk ice cream and ice lollies whilst increasing sales in the luxury ice cream and individual portion ice cream sectors of the take home market where we have a growing share. Overall, sales in the second half of the year should benefit from a large number of new product listings achieved during the course of the last three months, and a strong promotional strategy.
"We are also confident that the achievement of higher service levels than last year will materially improve our comparative performance. April's sales were similar to last year's record levels and the board believes that the results for the full year should show a further improvement over those of 2002, in line with expectations."
He concluded: "Following the successful integration of the Nestlé business during the course of last year, the challenge now facing the company is to continue to drive profitable organic growth. We will underpin this with a continued commitment to investing in the future, in both our capital base and our people."