Heinz records 4% decrease in profits

THE Irish arm of US food giant Heinz recorded a 4% drop in pre-tax profits last year to £12.2m (€14.2m), new figures show.

According to accounts just returned to the Companies’ Office, HJ Heinz Frozen and Chilled Foods Ltd incurred the drop in profits after sustaining a marginal drop in turnover from £97.2m to £96.3m in the 12 months to the end of April.

The filings show that the producer of iconic brands Heinz Ketchup and Heinz Baked Beans also sustained a drop in operating profits from £11.8m to £11.6m.

The company’s Irish operation — north and south — is engaged in the sales, marketing and distribution of all Heinz brands. It also manufactures frozen ready meals under the Weight Watchers brand and markets former brands of HP Foods including HP, Lea & Perrins and Amoy.

The returns show that the numbers employed by the firm last year decreased from 294 to 279, with staff costs dropping from £12.3m to £11.2m.

According to the directors’ report, “commodity cost pressures and market promotional intensity” were factors in the profit decline. Like-for-like volume was flat in the Republic and there was a further softening in Northern Ireland performance.

The directors stated that “the commercial environment is expected to remain highly competitive in the year ahead. Continuing pressures on the overall scale of the Irish grocery market, retailer focus on their own-brand ranges and aggressive competitor activity all continue to feature in the challenging economic, retail and consumer market environment”.

The company added, however, that it remains confident of continuing to trade successfully here due to its brand value benefits and “a number of new product opportunities”.