Farmfoods sales top £600m as frozen-food market hots up

FROZEN foods retailer Farmfoods has seen sales push through the £600 million mark and pre-tax profits rise by 44 per cent to £24.5m as it shook off the economic woes affecting other food retailers.

The Cumbernauld-based company last year slashed its debt almost in half from £22.4m to £11.6m.

The pay of its top director, believed to be its publicity-shy chairman Eric Herd, fell from £1.1m to £508,000.

But he benefits from the company’s £6.9m interim dividend, the same as in 2010, of which 79 per cent holder Herd receives £5.5m. He also gets a £48,000 pension pot contribution.

George Herd, 29, an accountant who joined the board of the firm in 2010 and has seen the size of his stake double in the last year, pocketed £552,000.

Farmfoods, which originated in Aberdeen in 1955, is among Scotland’s largest privately owned companies in terms of sales and payroll. The workforce has risen from 2,989 to 3,020.

With total sales rising from £578.5m to £604.4m, it is still far behind its rival Iceland, which increased sales 5.9 per cent to £2.4 billion in the year to March 2011. But while pre-tax profits at the Wales-based frozen food group increased 15 per cent to £155.5m, the Scottish firm is succeeding in growing its margins.

It is thought that the Herd family backed out of a potential break-up of its rival last year after joining forces with Asda to mount a bid for the company.

Noting that “trading conditions have been and are expected to remain competitive”, the firm boosted the amount it invested in its 300-strong store portfolio from £4.9m to £7.9m.

Last year market data showed surging year-on-year growth for the frozen food retail market, which was up by 5.2 per cent in value, according to Kantar.