Produce Investments Plc (LON:PIL) shares traded lower following final results in which it told investors that operating profits were in line with board expectations.
The UK potato and daffodil seed producer, which in September became a takeover target, reported a ‘solid performance’ despite an ‘oversupplied market’, meanwhile, it noted poor spring weather had impacted its Rowe Farming and Jersey operations.
Funds managed by Promethean Investments in September made a £52.95mln conditional offer to acquire the company which was recommended by the company’s independent directors.
Operating profit was reported at £6.1mln, compared to a restated figure of £7.8mln for the preceding year. Earnings (EBITDA) amounted to £12mln, and, highlighted exceptional costs of £14.7mln as well as prior period adjustments of £1.4mln.
It reported a £9.3mln loss for the period. At the end of the year, it had £6.4mln of cash and short-term deposits – plus £10mln of inventory and £18.9mln biological assets.
Angus Armstrong, Produce Investments chief executive, said: "In a difficult year impacted by the adverse spring weather we have seen business gains and improved operational efficiencies in our core fresh segment helping sustain our performance in a tough retail environment and I am pleased to say that we have delivered operating profit in line with the board's revised expectations.
“Rowe Farming and Jersey both suffered due to the long periods of cold and unseasonal spring weather and our Swancote facility continued to struggle in a fragmented and competitive market sector.
“We have invested heavily in our Restrain business and consolidated our development and manufacturing to one location, and the Linwood crops business is now well established and performing well.”
Armstrong highlighted that the group remained cash generative, and, looking forward, said the company would focus more on the daffodil market.
He also reflected on the loss of a significant customer: “Whilst we were disappointed to announce a three-year wind-down of one key customer contract, we are confident that we are well positioned to pick up new opportunities in the market, and we will continue to review the cost base of the company.”
Produce Investments shares were down 3.5p or 1.93% to 178p.