Worst is over, says Brake chairman
Thursday 25 September 1997
Even so, there was a warning of further losses to come after "severe problems" at the business slashed the group's profits in the half-year to June.
Frank Brake, chairman, yesterday hailed the business as "one of the biggest successes in the first half of 1997". According to Mr Brake, the worst at Puritan Maid was over. The rescue operation had been a success, he said, adding that recent months had seen significant reductions in costs. The board is confident that Puritan Maid will break even by 1998.
A series of inappropriate contracts resulting from management misjudgement were blamed for the downturn at the business, acquired from Forte in November 1995.
Puritan Maid saw operating profits of pounds 1m turn into a loss of pounds 3.9m in the latest figures, in line with expectations following a warning in December, when Brake's shares crashed. The group said that a further "small loss" was also likely in the second half.
Sorting out Puritan Maid has involved restructuring some contracts and terminating others. It has also been costly - first-half Puritan Maid operating expenses were up by almost 40 per cent on last year. The resulting losses more than wiped out a 12 per cent jump in profits in the core frozen foods distribution business.
Overall, group profits slid 13 per cent to pounds 11.2m in the six months to June, although the half-way dividend rises 10 per cent to 3.2p.
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