Growth of the multi-pack crisp damages Bensons

PROFITS at Bensons Crisps, the crisps and snack-food company, were cut in half last year as prices fell and the company spent money on its fledgling distribution network, writes Robert Cole.

Bensons, the fourth-placed operator in the UK after United Biscuits, Pepsico and Dalgety's Golden Wonder, has had to adapt to new patterns among snack-food consumers. Sales have shifted from corner shops to superstore retailers. In the process single-bag crisps are being superseded by multi-pack products.

The profit margins on multi-packs, which are now responsible for 45 per cent of the market, are also narrower. Group turnover rose but Bensons' operating margins fell from 4.2 per cent to 2.5 per cent.

Taxable profits were pounds 500,000 for the 12 months to 30 November, compared to pounds 1m previously.

Malcolm Jones, the chairman, said the group is planning to build a large plant near its base near Preston, Lancashire. He hinted that it may need to fund the pounds 10m development with a rights issue. Bensons is also building a distribution network supplying independent retailers.

The shares, quoted on the Unlisted Securities Market, fell 3p to 78p. Earnings per share fell to 5p from 9.8p and the dividend was stuck at 2.85p.