Profit warning takes bite off Snackhouse

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The Independent Online

Snackhouse, the British food manufacturer, said yesterday it had suffered a "disappointing interruption" to growth, with what should have been its most profitable trading period hit by fierce competition and the loss of a major contract. Its ambitions to expand into niche snack markets would suffer, it said.

Snackhouse, the British food manufacturer, said yesterday it had suffered a "disappointing interruption" to growth, with what should have been its most profitable trading period hit by fierce competition and the loss of a major contract. Its ambitions to expand into niche snack markets would suffer, it said.

Shares in the company yesterday hit a three-year low of 31p, following a profits warning. They closed down from 44.5p, to value the company at around £13.8m

Last year Snackhouse, formerly known as Bensons Crisps, acquired Country Harvest and K Snack Foods to lessen its dependence on the shrinking potato crisp market and instead broaden its range of organic and low-fat snacks.

In July it trumpeted a 14 per cent growth in first-half profits, up from £0.9m to £1.03m, but saw its successes undermined by the price-led promotions launched by larger rivals such as Walkers Crisps. The company's Simpsons snack range, based on the cartoon series, was also overshadowed by the popularity of Pokémon snacks made by KP Foods. Last month the company suffered another setback when an undisclosed retailer withdrew from a major contract.

Neil Hopkins-Coman, managing director, said: "We are particularly disappointed by the loss of this contract with one of the major retailers, who pulled out the day before [we signed] ... responding to the way that other retailers had changed their offerings."

Snackhouse intends to pursue its strategy of acquisitive development, he said, but added: "What we are now facing, with the share price being depressed, is a more difficult execution."

Commercial director Adrian Luckham had resigned and would not be replaced, said the company yesterday.

One analyst at the company's brokers Peel Hunt, said: "I don't think the [acquisition] strategy has been derailed. A lot will depend on what comes up in this area. Snackhouse is not going to pay silly money but it has to be opportunistic because inevitably, attractive deals come along when you are least prepared."

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