Norish narrows losses but dividend drops also

Food care company Norish has narrowed its pre-tax losses, but has also lowered dividends and says it faces a tough year ahead.

Announcing results for the year to December 2003 the company said that pre-tax losses had narrowed to £400,000 (€590,000m), from £2.5m (€3.73m) in 2002.

The company, which is listed on the Irish and London stock exchanges, said that directors are recommending a final dividend of €1.27, subject to shareholders’ approval.

This brings the total dividend for the year to €2.54.

In a statement Norish said while this is a reduction on previous years, the company needs to preserve its resources to both strengthen and re-position itself in the market place.

Looking at its markets Norish said there is less opportunity to develop in a declining UK cocoa market, emphasised by the recent news from a major customer that it is to change their cocoa processing procedure which will adversely affect Norish's income streams.

This change will occur in 2005.

The company said turnover for the company's ambient and commodity business fell by 12%, predominantly as a result of the continued decline in cocoa volumes.

However, on a positive note Norich believes there is further growth potential in the coffee market.

Norich added that its temperature controlled division performed reasonably well in 2003 despite further significant increases in insurance costs. Turnover increased here by 1%.

Looking forward, the company said it expects a challenging year and that all necessary steps are being taken to both consolidate and grow the group’s business base.

"Conditions in the markets in which we operate are expected to remain challenging in the current year," executive chairman Ted O'Neill said in a statement, adding that Norish needs to replace business that will be lost next year.