2004 press releases

At the Annual General Meeting held in Willerby near Hull today, the Chairman Peter Blackburn said:

"Trading in the first quarter was in line with expectations, with underlying retail sales for the 13 weeks to 3 July 2004 up 1.5 per cent. This compared with a period of strong sales growth last year, prior to the loss of the Sainsbury’s savoury products business in July 2003.

We have made further progress on inflation recovery, with selling price increases now matching the rise in input costs year on year. However, inflationary pressures are expected to continue, driven particularly by protein and utility costs.

The UK market undoubtedly presents challenges to all food manufacturers as retailer consolidation increases and competition grows ever more intense. Nevertheless, we believe that we possess substantial inherent strengths including our focus on producing great food and on growing market sectors and customers. This is complemented by our well-invested assets, technical expertise and strong track record of product innovation.

We welcome to her first AGM our new Chief Executive Pat O’Driscoll, who joined the business on 29 March. She has already simplified our management structure and strengthened accountability by creating a new operating board, and is adding impetus to our efforts to leverage the group’s scale.

As already announced, we have continued to strengthen our focus on our profitable, core activities through the sale during the first quarter of Eden Vale Minsterley and Emile Tissot. The total proceeds of these disposals were £20.0 million.

We have also maintained our share buyback programme as a means of returning cash to shareholders and mitigating any earnings dilution arising from disposals. Since the start of this financial year we have bought 5.1 million shares at a cost of £7.9 million.

We anticipate an improvement in our underlying year on year comparative sales performance as we pass the anniversary of last year's major contract loss.  Our initiatives to reduce costs and raise efficiencies in production, procurement and service provision have already begun to deliver their expected benefits.  To meet the current competitive environment, we are focusing with great determination on delivering an increasing contribution from our structural cost savings and ensuring that we make the most of all our inherent strengths."