The Investment Column: Lottery hampers Park Food profits

Birkenhead-based hamper group Park Food has often been mentioned as a possible bid target. Such suggestions are perhaps hardly surprising as the outcome of any approach would hinge on just one vote - that of 64 per cent shareholder Peter Johnson, who also chairs another Merseyside institution, Everton football club.

Last month the shares, depressed by an earlier profits warning, bounced off their year's low of 74p on news that fellow Park Food director Stuart Marks had sounded out Mr Johnson about the possibility of mounting a management buy-out. To avoid any potential conflict of interest, Mr Marks resigned from Park's board while information about the company was disclosed to him and his advisers.

No further takeover developments emerged with yesterday's results for the year to March, which revealed Park's first profits setback since 1988. Pre-tax income fell 31 per cent to pounds 9.5m on sales 6 per cent lower at pounds 161m.

Park blamed three factors for the shortfall. One was the National Lottery, which took loose change out of the pockets of some of Park's one million customers that would normally have gone into saving up for Christmas hampers at up to pounds 200 a pop.

Problems linked to the closure of Park's wholesale hamper office in Windsor and moving it to Birkenhead were also cited. But the biggest, albeit unspecified, hit was taken at Handling Solutions, the marketing services and promotions handling division run by Mr Marks. Big contracts on its direct mail and database management side failed to materialise until after the year end.

Given the highly seasonal nature of its business, Park continues to diversify into other areas. Test runs for a new type of flavoured potato snack have already started and it should move into commercial production in the very near future. About pounds 4m of investment is riding on the success of this venture.

Profits are expected to rebound this year to at least pounds 12m, implying a price/earnings ratio of 21, with the shares down 1p at 106p yesterday. But with Park in effect in play, the fundamentals of the business are unlikely to have much bearing on the shares in the short-term. And as the old stock market adage goes: never buy on bid hopes alone. Best watched from the sidelines.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones