Jacob Fruitfield restructuring costs contribute to profit plummeting 81%

RESTRUCTURING costs at Jacob Fruitfield Food Group Ltd last year contributed to pre-tax profits plummeting by 81% to €2.1 million.

Accounts just filed by the group show revenues last year decreased by 11% from €81.5m to €72.6m in the 12 months to the end of December.

Jacob Fruitfield’s brands include Jacob’s biscuits, Fruitfield jams and marmalades and Scots Clan sweets and confectionery.

The company made an operating profit before exceptional items of €11.3m last year compared to €16.2m in 2009.

However, restructuring costs and one-off costs totalling €7m, along with interest payments of €1.5m, reduced the group’s profits to €2.1m.

One of the related costs was €1.17m spent on a review of strategic options and as a result, Jacob Fruitfield agreed to a sale of the group to Valeo Foods earlier this year.

The deal was announced in August — Valeo owns a number of Irish brands including Batchelors, Odlums, Shamrock, Sqeeze, Roman, Erin, Lustre, Amigo and Picnic.

According to the directors’ report for Jacob Fruitfield, the deal “represents an exciting opportunity for the business to continue to develop as a leading Irish food group”.

The €5.5m in restructuring costs in 2010 arose from the restructuring of the group’s pension funds and the charge relates to a settlement loss on the Irish Biscuits Defined Benefit Scheme.

The profits take account of non-cash depreciation and amortisation costs of €3m.

Restructuring resulted in numbers employed decreasing from 102 to 62 with the group’s salary bill decreasing from €7.48m to €4.44m.

The group had a deficit in shareholder funds totalling €12.6m.

The group had bank loans totalling €36.3m last year and a note attached to the accounts states that as part of the deal with Valeo “the existing group loans will be repaid and that they will replaced by the new business’s bank funding”.

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