Wet weather takes toll on Geest
salads and reduced profit growth at Britain's Geest. But a return
to sunnier weather in the latter part of the summer allowed the
company to salvage some pride in the first half.
The poor summer weather in many parts of Europe - weather which has led to several parts of the Continent ending up under water for much of the time - has taken its toll on results at the UK fresh food group Geest, mainly because of a decline in sales of its prepared salads business which accounts for around 35 per cent of sales and profits.
However, the company remained bullish about its prospects after a return to growth in the salads business as the weather improved. First half pre-tax profits were £18.2 million (€28.9m), slightly higher than the £17.7 million in 2001, and in line with an earlier trading statement issued by the company in June prompted by the poor weather in the first two months of the summer.
But there was much to be encouraged by, including strong sales growth of 16 per cent, and the company said that the underlying drivers of growth remained in place.
Sir John Banham, who recently joined Geest and became non-executive chairman on 1 September, said: "Profits have been maintained and it remains our expectation that for the year as a whole, operating profits will be no lower than those achieved last year. The outlook for fresh prepared foods remains attractive and we are confident that we will return to normal Geest service next year.
"Although the unusually poor weather in May and June affected our salads business, profit across the rest of our fresh prepared business grew - reflecting a good portfolio of operations - and growth in salad sales returned to normal levels in August. The group has strong market positions, good cash flow and a sound balance sheet - very valuable attributes to support future growth."
