PARK Food Group is having an extremely close look at the future of its DJ Spuddles Original Gourmet Fries manufacturing subsidiary, which achieved sales of a derisory #99,000 in the first six months.
Spuddles was a gleam in the eye of chairman Peter Johnson, who owns Everton Football Club and who is reducing his executive role at Park. So far #11.7m has been invested in the venture, which in the preceding six months saw sales to the catering trade of #39,000.
The lack of progress was put down by new chief executive Alastair Kerr to lack of promotion and the inability to impress the catering trade with the advantages of Spuddles, which lost #115 for every #1 of turnover.
Mr Kerr said losses which were running at #50,000 per week have dropped slightly and the product
is now being sold through the Iceland frozen food chain, while an oven cook version is being launched at the end of December.
It had been expected that turnover would now be running at an annual rate of #8m for the fries, which can be cooked in one minute and which contain no additives.
There was the usual interim group loss at the Christmas hamper, vouchers and airline gift set group which rose #1m to #6.2m.
That included the Spuddles deficit but before extraordinary charges of #331,000 relating to management changes in the HSL marketing services division where profits virtually disappeared.
There is an imminent court case which will be held in private relating to #7.8m of loan notes issued to the vendors of HSL.
The matter is sub judice but may well relate to performance guarantees.
Mr Kerr is looking for acquisitions in the gift package sector. Apart from British Airways, another major customer is Boots. The company is highly cash generative thanks to advance payments by hamper customers - there is an expectation of a #114m inflow this year before suppliers are paid.
The company does not publish a five-year record in its annual report, partly for reasons of space and cost, according to finance director Neil Alexander.
The shares closed unchanged at 44p just above their five-year low.
The interim dividend is unchanged at 1.1p.
On current indications, full-year profits are likely to show a decline from #9.6m to about #8.2m.
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