Solid first half from Sims Food Group

Eurofood, Dec 3, 1998

Although sales from continuing operations for the first half of the year at Sims Food Group, the UK meat products manufacturer, remained flat at 20.5m [pounds sterling] (ECU29.3m), chairman Nick Irens said he was happy with the company's performance, especially the strengthening of its operating margin from 4.8% in the last six months of 1997 to 6.5% in the first six of 1998. Pre-tax profits also showed a healthy rise of 6% to 1.1m [pounds sterling], ahead of expectations.

Volume sales rose by 10% overall, Irens said, with strong growth from burgers and cooked and assembled products. However, much of this increase was offset by a fall in selling prices, as a result of lower raw material prices. Sims is one of the leading suppliers of meat to the foodservice sector, in particular to fast-food operators, and the dynamic growth in this market has contributed to Sims' volume growth. The strength of sterling took its toll on the company's turkey operations, as it continued to encourage cheap imports, and sausage volumes also fell compared to the first half of 1997 as a result of the discontinuation of a number of low-margin lines.

Sims Food Group, interim results ([pounds sterling] '000)

                                  1997      1998

Turnover
- Continuing operations          20 567    20 534
- Discontinued operations        35 228         -
Total                            55 855    20 534

Operating profit
- Continuing operations          1 478     1 323
- Discontinued operations          192         -
Total                            1 670     1 323

Pre-tax profits                  1 040     1 104

Source: Sims Food Group