Trading during 2016 was overall very strong and sales at £266.3m were up 7% on the previous year. The headwinds of extreme raw material inflation and currency uncertainty, following the referendum result, were navigated succe.ssfully. During the year a long term agreement was signed with the largest customer, the business was refinanced on more favourable terms, new customers were secured and the business restructured its cost base making significant savings. The ending of the long term relationship with Marks and Spencer was executed in a controlled manner.
Before one-off restructuring costs (of £3.1m) the business showed solid operating profit growth, up £1.6m (+41%) to £5.5m.
In January 2016 the business commenced a new customer contract on “wetfish” under a multi year agreement allowing the business to have a very strong beginning to the year. In April 2016 a new fishcake contract began with the largest customer, following a significant capital investment in class leading technology. The sales grew throughout the year and that growth is anticipated to continue during 2017.
In May 2016 the business was unable to reach an agreemnt with Marks and Spencer and a managed exit was executed starting in September 2016 and the final production runs taking place in November 2016.
The business executed a restructure program where manufacturing capacity was reorganised which includes the exit of one of the manufacturing plants.
In August 2016 a long term agreement was signed with the largest customer providing security for a large proportion of the busines. This was followed by a business win for another new customer where supply commenced in September and the range has continued to grow since then.
Late in 2016, listings were secured for branded products (under both “The Saucy Fish Co.” and “Seachill” brands) where supply commenced in January 2017. Additionally, export listings have been gained, particularly in USA and Canada where “The Saucy Fish Co.” is now firmly established.
Throughout the second half of the year raw material costs increased significantly driven by both structural supply challenges and the devaluation of sterling versus US dollars, Norwegian Kroner and Euro. The vast majority of the inflation was recovered in a timely manner in 2016 and the remainder will be completed during Q1 of 2017.