Clarke overcomes equipment delays

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The Independent Online
CLARKE Foods, the ice cream maker transformed by its pounds 13.3m acquisition of Lyons Maid in March, said it was confident it had resolved the commissioning problems with new equipment that held up restructuring in the wake of the deal.

Its plant in Stourbridge, West Midlands, is churning out more than one million litres a week, while a lolly plant capable of producing 50 million Zooms, Mivis and other icicles a year has been installed at Telford, Shropshire, and will shortly be in operation. The group has invested pounds 14m on new equipment at the two plants, pounds 5m on researching new ice cream formulations and pounds 2m on computer equipment.

The group admitted that the problems had a 'ripple effect' on its performance but said 'the corner had now been turned' and it had built up enough stocks to meet demand for the rest of the season.

The group made pre-tax profits of pounds 168,000 in the six months to 2 May, down from pounds 364,000 last time. It said that comparisons were difficult because of the transformation of the group, but refused to break down the figures.

The results included two months of Lyons Maid and a contribution from the ice cream businesses acquired from Hillsdown a month before the end of the previous period. The earlier figures were also boosted by pounds 305,000 interest from surplus cash. This has now been spent, giving interest charges of pounds 108,000.

The acquisition has boosted Clarke's branded sales to 52 per cent by volume and 72 per cent by value compared to 30 per cent at the Hillsdown businesses. Average selling prices in the branded sector in the past 10 weeks have risen by 65 per cent, partly through a change in mix and a move to more up-market products. It has been heavily promoting its up-market brands, sold under the Clarke's label.

Earnings per share were 0.05p, down from 1.65p, but the dividend was maintained at 0.75p. The shares closed up 5p at 107p.