Greenvale firm beats supermarket war with long-term contract prices

The Duns-based company, best known for its Greenvale potato brand, yesterday posted a 4.4 per cent rise in operating profits to £4.8 million for the six months to 31 December, despite turnover dropping by 3 per cent to £79.4m.

Produce Investments – which supplies tatties to catering heavy- weight Compass as well as grocers such as Sainsbury’s and Tesco – blamed the fall in revenues on a “low-priced season”, which was due to a large number of lower-quality spuds being produced.

Chief executive Angus Armstrong explained: “The value of potatoes has experienced significant deflationary pressure, although this has had limited impact on the group’s results due to our contractual procurement model.”

He added that the group – which employs 834 staff, including 238 at its sites in Burrelton and Duns – was still on course to hit its full-year financial targets. Phil Carroll, an analyst at house broker Shore Capital, said: “We are cautiously optimistic on the group’s full-year prospects, which are supported by a strong balance sheet that provides management with flexibility to grow acquisitively as well as organically should the opportunity arise.

“Cash generation was strong during the period with net debt declining 29 per cent to £9.17m.”

The company, which joined the Alternative Investment Market in 2010, held its interim dividend at 1.82p.