Hazlewood shares retreat in wake of profits warning

Hazlewood Foods, the world's largest sandwich producer, warned yesterday that fierce competition in the convenience foods market had hit profits. It said 1999-2000 profits would only just better the previous year and that most of the earnings would be wiped out by restructuring charges.

The company, whose shares fell 8p to 84.5p, said convenience foods sales have been "running a little below plan". It said pre-exceptional profits would be at the lower end of City forecasts for the year ended 31 March 2000, but ahead of the previous year's £40m. The company was expected to report pre-tax profits of between £40m-45m.

Kevin Higginson, the finance director, said the downturn was due to competition in the frozen ready-made meal market from branded competitors. He said rivals had gained ground through special promotions. Hazlewood also said exceptionals for 1999/2000 would total £40m, and there will be a further £4-5m for the following year.

Charlie Mills, an analyst at CSFB, which yesterday cut its forecast for 1999/00 from $44m to £41m, said: "They've clearly had a grizzly second half, suffering from volume pressure and price deflation."