Four'N Twenty pies owner Patties Foods turns corner with second-half profit

Eli Greenblat
August 25, 2014
The Age
Patties Foods, whose brands include the famous Four’N Twenty meat pie range, has posted a return to profit growth in the second half after a tough start to the year.
The company, whose profit dived in 2013, has pledged to improve earnings this year as it expands its selling channels, invests in its core brands and battens downs costs.
Recently appointed CEO Steven Chaur said despite pressures in the market he saw growth opportunities for the business.
Mr Chaur said during the year Patties maintained market share leadership in all its categories, with branded growth from the ‘Patties’ range up 21 per cent in the normally tough supermarket channel supported by product and packaging innovation and a marketing campaign.
Branded growth from its ‘Nanna’s’ frozen fruit range was up 92 per cent.
Patties has faced intense competition to many parts of its business in the last few years. It has a private-label business that makes foods for contracted grocery clients while also owning some of the most popular brands in the frozen foods aisle such as Patties, Four’n Twenty, Herbert Adams and Nanna’s.
It has felt the pain from the supermarkets as they screw down ­suppliers and also devote more space to private-label brands.
On Monday the food manufacturer reported a full-year net profit of $16.7 million for 2014, against $4.8 million for the previous year.
But the result was down slightly against an underlying profit of $17 million for 2013.
The result was inline with earnings guidance provided to the market in February, with the second half net profit up 5.1 per cent (versus a 7.5 per cent dip in the first half) as the company swung back into positive territory.
Revenue for the period was up 1.2 per cent to $247.7 million, despite the loss of a major private label frozen fruit contract.
Profit margins were stable for the year.
Patties declared a fully franked final dividend of 3.9 cents per share, flat with last year’s final payment, payable on October 8