£1.9m profit is tasty result for food maker

UNIQ, the convenience food maker, has returned to the black for the first time since 2003 after a strong performance from its operations in the UK and France.

But the firm’s chief executive Geoff Eaton said he expected business to be "tougher in 2008 than in 2007" as consumers pare back spending on convenience and treats in the face of rising household bills.

The company, which makes sandwiches, deserts and readymeals for the likes of Tesco and Marks & Spencer, banked a pretax profit of £1.9 million over 2007, compared with a loss the year before of £21.9m.

In the UK, operating profit hit £5.9m, from a loss the year before of £1.6m, with a strong showing in the second half. In France, underlying profit was £200,000, from a deficit in 2006 of £1.1m.

Uniq’s performance was also helped by a net gain of around £235m from the sale of a French unit St. Hubert to Dairy Crest last January – its third selloff in three years, including its Belgian salads operation.

During the year, the company said it had to deal with a "harsher economic climate and "adverse weather patterns" during the summer, while in the latter part it saw "unprecedented raw material inflation" and a festive season overshadowed by shrinking consumer confidence in the wake of the credit crisis.

"Our progress in 2007 was delivered in the face of increasingly harsh economic circumstances, which have continued into 2008," said Mr Eaton.

"The significant changes we have made over the last two years have equipped us better to deal with this tougher environment and to continue our recovery."

Overall revenues for the firm, which has seven operating bases in the UK, including Pinney’s in Dumfries & Galloway, rose by just over a third to £736.1m.

Uniq said Pinney’s enjoyed "great success" in the last year with the M&S Cook! range.

Mr Eaton, who instigated a revival plan shortly after arriving at the group in 2005, said Uniq’s turnaround was on track helped by the UK and French operations return to profit. But he also cautioned that the company’s recovery still had some way to go.

"Our businesses are now better prepared for the tougher economic environment we face in 2008.

"Whilst the shortterm outcome carries uncertainties, there remains considerable potential for improvement in profit margins."

Uniq, which employs around 6600 staff, also said that it was renegotiating the terms of its contract with major client M&S – which accounts for 27 per cent of group sales – in a move which could have a "significant impact" on its UK arm.

The firm said that it had been appointed by M&S as supplier for its three core "food to go" offerings – fish, deli and premium desserts – and hoped that the contract discussions would lead to a greater share of M&S business.