Produce chips in for turnover rise

A SCOTTISH potato producer that supplies Birds Eye, McCain and Tesco has unearthed a 10 per cent rise in turnover in its maiden results as a listed company.

Revenues at Duns-based Produce Investments grew to £171.4 million in the year to 25 June, boosted by higher spud prices.

But those same rising prices also hit the group when it had to buy in tatties from other growers to fulfil contracts, triggering a drop in operating profits to £6.4m from £7.7m.

Bottom-line profits fell to £2.6m from £5.6m after the company booked nearly £2.8m in costs relating to its flotation on the Alternative Investment Market (Aim) in November.

Yet joining Aim allowed the company – which trades through its GreenVale subsidiary – to raise £15.6m, letting it pay down its debt to £8.1m from £25.2m and giving it a warchest to make acquisitions.

The drop in profits didn’t stop Produce recommending a final dividend of 3.64p, coming on top of the 1.82p interim divi.

Chief executive Angus Armstrong said: “The market remains fiercely competitive and difficulties facing the UK consumer are well documented. Despite this, the board is confident the group is well positioned to expand.”

Shore Capital analyst Phil Carroll said the combination of high prices and lower retail volumes had been anticipated.