Frozen
Frozen operates in attractive and growing markets. The division’s profitability was impacted by a strong currency exchange this year
The focus for our Frozen division is to meet the needs of the cash conscious consumer’s desire for healthy yet convenient food
Further strengthening of the Euro (our manufacturing operations are based in Ireland) and increased promotional activity impacted the Frozen division this year. Total revenue was 11.0% ahead at £272.4m (2007/08: £245.4m) with underlying revenue7 3.7% higher. The impact of price increases of 8.6%, as we successfully recovered commodity inflation, saw Frozen volumes decline by 4.9%. Despite volume decline, frozen food, as evidenced by most market data, remains a popular choice for time poor families and cash conscious consumers.
The impact from the continued strength of the Euro impacted overall profitability by £5.0m in the full year. As a result, profit from operations* reduced to £9.3m (2007/08: £11.4m), with operating margin* at 3.4% (2007/08: 4.6%). The division has undertaken a number of cost reduction programmes to lower its cost base.
Pizza
We are adjusting our business model to the current economic conditions with a continuous drive to lower cost in our manufacturing base. We consolidated pizza production into two well invested lean manufacturing sites, with the move of operations and employees as we closed the smaller Poldys site in Ireland to the larger scale facilities at Naas and Longford.
We re-launched our San Marco pizza range during the second half, profitably targeting a specific price point for the constrained consumer. We expect further promotional activity to also drive sales in this segment. In retailer own brand, we continued to develop new products for several of our customers, reflecting market data showing supermarket’s own label ranges to be increasingly popular.
Fish & Vegetables
Donegal Catch, our branded fish business predominantly retailed in Ireland, continues to experience good growth in the sector and remains number one in Ireland, along with our Green Isle vegetable brand. With over half of the Irish market, Donegal Catch was introduced into the UK during the second half of the year and we continue to work hard to secure business through our major customers.
|
2008/09 |
2007/08 |
|---|---|---|
Revenue |
£272.4m |
£245.4m |
Operating margin* |
3.4% |
4.6% |
Profit from operations* |
£9.3m |
£11.4m |
Pastry, Meat & Meat-Free Grills
Our prior year acquisition of the McDougalls brands in Pastry has been successful, with good progress made. Our challenge to improve the performance of the Pastry and Meat Grills businesses was set out last year and remains a key priority. The McDougalls acquisition was fully integrated into our centre of excellence at Portumna in Ireland. Consolidating capacity is helping to improve the efficiency of our operation, enabling us to provide a better service for customers and drive superior product innovation and margin improvement. The McDougalls frozen pies range was successfully re-launched during the year, establishing itself as the number one frozen pie brand in the 52 weeks to 21 March 2009 (ACN Scantrack 52 w/e 21/03/09).
Holland’s continued its recovery plan, through product improvement and effective press promotion. Holland’s, which remains a strong brand in the North West of England, has re-focused on its core chip shop outlets and is looking to increase distribution in foodservice and at sporting venues. Whilst Meat Grills were again impacted adversely by the poor summer weather in the important barbeque season, the Dalepak business benefited from a number of performance improvements and the launch of the exciting Gardein Meat-Free brand. The growth in the healthier cooking market continues to provide attractive opportunities.
No.1
The McDougalls frozen pies range was successfully re-launched during the year, establishing itself as the number one frozen pie brand
Pizza
We re-launched our San Marco pizza range during the second half, profitably targeting a specific price point for the constrained consumer
Our McDougalls frozen pies are a value choice for all the family
We produce over two million frozen and chilled pizzas every week
Donegal Catch, the number one Irish fish and vegetable brand, was launched in the UK during the year
Our modern sites help us to deliver high volumes for our customers, day in, day out
* Prices correct at time of publication,
27 May 2009