RNS Number : 7486F
Uniq PLC
19 January 2010
19 January 2010
Fourth Quarter 4 Trading Update
UK business back in profitable growth
Uniq plc, the convenience food group now focused on the UK, today announces its fourth quarter trading update covering the period since the Q3 update on 15 October 2009.
Following disposal of the French, German, Polish and Netherlands business units (reported under 'Discontinued businesses' below) the group is a wholly UK focused business serving two principal market sectors - Desserts and Food to Go. Today's format will provide the reporting template for future announcements.
The UK business returned to sales growth in Q4 (13 weeks to 26 December) in both principal market sectors as a result of new business won, with overall sales growth of 4.0%. We continued to trade profitably, delivering an operating profit performance in line with the Board's expectations.
Desserts
The strengthened desserts management team is starting to make real progress in implementing its new consumer-led strategic plan, delivering Q4 sales growth of 0.4% and a good performance at Christmas, reversing the decline reported in the previous two quarters.
In the second half of 2009 we successfully recruited highly experienced commercial & development teams who have focused on creating new and improved product ranges for 2010. These plans are supported by investment of more than £10m in capital equipment to create the flexibility, value for money and formats most relevant to consumers. We expect to reinvigorate the sector of the desserts market we serve, drive higher sales and build on our market leadership.
The consolidation from three factories into two was successfully completed in the quarter on plan and within budget. The sale of the Paignton site for £1.25m has been agreed and will complete in the next few weeks.
Food to Go
In Food to Go sales were up 11.5% in the final quarter.
Underlying sales recovered significantly compared with the first half as consumers responded well to the swift changes in our product range to deliver better value and innovation in key categories.
In Q4 at Northampton the business benefited from the new sandwich volume won with M&S which will reach a run rate of £15m of annual sales early in Q2 2010. This was partly offset by the loss of a significant proportion of our airline business through the airline's decision to reduce food services on short haul flights.
Our factory in Spalding successfully launched £12m of annualised new business with The Cooperative and secured a clear number two position in the dressed salad market.
These new sales wins provide momentum for 2010.
Discontinued businesses
The French business was sold at the start of Q4. Agreements to sell the business units in The Netherlands and in Germany/Poland were reached in Q4 and were approved by shareholders in General Meeting on 5 January 2010. The £18m Netherlands sale was completed on 9 January 2010 and the £25.7m Germany/Poland sale is expected to complete in March 2010 subject to clearance by the German competition authority. Trading in Northern Europe in the final quarter was consistent with the trends earlier in the year with an overall sales decline of 1.7%.
Pensions
We are actively engaged with the pension trustee and the Pension Regulator in finding a resolution to the funding of the UK pension scheme deficit. While the recent strength of worldwide equity markets has increased the value of scheme assets, the fluctuations in interest rates and in inflation expectations have increased the scale of the liabilities.
Financial position
As at 26 December 2009, the net debt of the Group was £4m. Adjusting for net proceeds after transaction costs and retained cash in the two businesses being disposed, the pro-forma position as at 26 December 2009 shows a cash surplus of £26m. Under the agreement we have with the pension trustee we expect to place approximately £40m in a separate account. This money can only be used by the Company following agreement with the trustee.
Outlook
The Board expects to report an operating profit for 2009 in line with its expectations. The strategy to focus the business solely on the UK has now been completed. The improvement evident in the final two quarters of 2009 is encouraging and is expected to continue into 2010 despite the tough market environment, although the first 3 weeks of 2010 have naturally been adversely affected by the weather.
For further information:
Uniq plc +44 (0)1753 276011
Martin Beer Group Finance Director
The Hogarth Partnership +44 (0)20 7357 9477
Julian Walker
This information is provided by RNS
The company news service from the London Stock Exchange
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