Albert Fisher talks to banks after yet another profits alert

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The Independent Online

Albert Fisher, the food group that seems to have issued more profit warnings than its shareholders have had hot dinners, delivered its second alert of 2002 yesterday and said it was reviewing its financing arrangements with its bankers.

The UK's largest supplier of frozen vegetables issued a warning on its profits only nine weeks ago, citing the falling price of frozen fish and vegetables and delays in the implementation of a management reorganisation. It also blamed the downturn in the US travel industry for difficulties at its US River Ranch operation.

The company said yesterday: "Trading has continued to be adversely affected by the factors outlined in January. Challenges in the short term have resulted in additional delays to the expected benefits of the business reorganisation."

The continuing problems more than offset "significant" new business wins in chilled food, so full-year profits for the 12 months to 31 August would be "materially lower" than market forecasts.

Albert Fisher's debt – £93.1m at the end of August – has weakened its position with suppliers, who have found it increasingly hard to obtain credit insurance when dealing with the group.

The shares fell 1.5p to 3p, valuing Albert Fisher at £21.6m. Brokers often tip the stock for its recovery potential.

Terry Robinson, the executive chairman, said at the annual meeting in December, he expected "some price improvement going into 2002" and saw the company delivering "increasing profit improvement" beyond the first half of the financial year.

Analysts said Albert Fisher could now make a loss this year. They had forecast pre-tax profits of between £5m and £6m, after last year's £13.4m loss on sales of £710m.

Mr Robinson moved from chief executive to executive chairman in December last year having refocused the group on its Fisher Food operation, which generates 50 per cent of turnover and supplies fish and vegetables to the likes of J Sainsbury and Tesco.

Mr Robinson said a stabilisation of the situation depended on the talks with the banks.

Other mishaps to have afflicted the company include frozen cockle beds off the Netherlands, a poor French potato crop, a failed English pea harvest, import controls on Indian prawns and, unsurprisingly, the El Nino weather effect.

Albert Fisher's problems began after an aggressive expansion programme during the Eighties which saw annual sales climb from £7m to £1bn in 10 years. The company was among several criticised for using accounting devices to inflate profits in the controversial 1982 book, Accounting for Growth.

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