Heinz Irish business feels the heat from discounters

The Irish arm of food giant, Heinz has blamed the increasing impact of discount retailers here for contributing to a 8.4% drop in its Irish business last year. 

New accounts filed by HJ Heinz Manufacturing Ireland Ltd show that pre-tax profits declined by 75% from £11.4m (€14,4m) to £2.87m in the seven months to the end of December last.

Revenues last year declined by 42% from £90.76m to £52.85m — the chief factor behind the sharp drop in revenues and profits was the accounting period for seven months as opposed to 12 months in the previous period.

The principal activity of the firm is the manufacture of frozen food products for Heinz’s manufacturing supply chain hub and turnover reduced by 21% when adjusted for the shorter accounting period.

The directors state that the turnover was impacted by the continuing declined in the frozen ready meal category.

The directors also state that revenues were impacted by “the meat integrity issues that received prominent media coverage in the first half of the current period”.

The directors state for the Irish business “the commercial environment will remain highly competitive in the period ahead”, but “we are confident that the business will continue to be successful moving forward”.

On the company’s overall performance, the directors stat that the period change, along with reduced turnover, changes in cost of goods, one off restructuring and reduced interest income, have reduced pre-tax profits by 63% year on year on a pro-rata basis.

A dividend of £58.58m was made during the year. Restructuring costs last year totalled £3.58m.