Losses on disposals of the non-performing meat and bakery businesses pushed the group into a pre-tax deficit of just under pounds 2m for the year to 27 March. Last year saw pounds 1.3m profit.
Borthwicks is expected to be back in profit next year. Tim Potter, an analyst at the stockbroker Smith New Court, forecast pre-tax profits of a shade over pounds 2m in 1993-4. And Peter Brackenridge, group chief executive, pointed out that earnings per share on continuing operations doubled to 2p.
The company indicated its confidence with a 9 per cent rise in the total dividend to 1.2p.
'I am absolutely delighted that we have rid the group of its loss-making members, so that we can concentrate on the proper growth of the core flavouring business,' Mr Brackenridge said. The flavourings business had held up well despite the recession in line with the perception of food as a resilient sector. 'But, as the recovery takes hold, food companies will launch new products which should help us rise,' he added.
The company's strategy was to grow organically where it had existing businesses - in the UK and the US - and by selective acquisitions and joint ventures elsewhere.
Businesses disposed of during the year were Burton Son & Sanders in bakery products, Ringmer, the group's last remaining abattoir, and Consumer Products, which makes prepared meals.
Total losses on the discontinued operations were pounds 2.8m, but Mr Brackenridge said the interest charge of pounds 614,000 would be roughly halved next year, assuming no acquisitions.
Mr Potter said the period of restructuring had been painful, but shareholders should now see some return. But he was cautious about Borthwicks' prospects, saying growth was likely to be slow.
The shares rose 2 1/2 p to 51 1/2 p.Reuse content