Choppy waters for seafood firm as sterling sinks and prices rise

The Grimsby-based company's latest annual report for the 15 months to the end of 2009 reveals its gross profit margin was driven down to 11.9 per cent in 2009, compared with a 12.5 per cent margin in 2008.

Private equity-owned Young's said it tried to combat the tough market with price increases and cutting costs through manufacturing efficiencies, as well as better promotion of branded products. "Increasing global demand for seafood products has seen significant inflation in the company's cost base," said Young's. "This has been compounded by the devaluation of sterling against the euro and the US dollar. As a consequence the company has implemented a programme of price increases."

Revenues for the 15-month period were up 93.8m to 475.6m. However, this was set against a comparative period of just 12 months, the year to the end of September 2008, when sales were 381.9m.

Pre-tax losses of 23.4m compared with 1.9m profits a year earlier. Young's primarily sells to major retailers, and said the increasing buying power of its customers has also put pressure on its margins.

The 205-year-old company employed an average of about 2,200 staff in 2009, but incurred 2.57m in exceptional costs through redundancies and factory streamlining.

"The company intends to continue to develop its current trade," said Young's. "Continued inflation of seafood and other input costs will necessitate increased selling prices and cost rationalisation. The prospects for 2010 remain strong."

Young's is part of frozen food group Findus, itself owned by private equity group Lion Capital. Lion bought the businesses in 2008 for 1.1bn.

Earlier this month Findus promoted its chief marketing officer, Leendert den Hollander, to managing director of its UK and Ireland frozen business. Findus chief executive Chris Britton said: "I know Leendert is excited to take on this challenging new operational role and deliver customers and consumers a more inspiring frozen experience."