Speirs Group’s profits tumble

Incessant rain and the Kaiko¯ ura earthquake were just some of the factors behind a Manawatu¯ food business’ profits falling nearly 300 per cent.

Speirs Group’s annual report, published on the Companies Office website in November, showed a loss of $205,000 before interest for the last financial year.

That is a stark 275.2 per cent turnaround from the year prior, when the company reported a $117,000 profit.

Speirs Group owns Speirs Foods - a fresh salad processor and distributor - and has a 40 per cent stake in Porirua-based heat-and-eat meal business Rosa Foods.

It also has a minuscule stake in a finance and leasing business and has the option to bring in revenue from a company it sold Omega-3 fish oil intellectual property to.

The big killer to the group’s profits was Speirs Foods, which went from a $460,000 profit in 2016 to a $309,000 loss the next year.

According to the annual report, signed by chairman Derek Walker and director Fred Hutchings, the result was ‘‘disappointing’’.

But there were several factors behind the loss, including a reduction in prices due to pressure from both customers and competitors, the report said.

Materials also went up in cost due to the wet year across the country, causing shortages for key supplies such as cabbage, broccoli and kumara.

On top of that, the November 2016 Kaiko¯ura earthquake saw freight costs rise due to State Highway 1 and the rail line closing.

There were also one-off costs after the company restructured some sales and administration roles, and from replacing management personnel, the report said.

Speirs Foods was heavily reviewed and changed in the past year, including automating more supermarket ordering, reviewing recipes and releasing a range of high-end salads.

Speirs Foods expected to be back in black in the next financial year, despite material costs for salads being likely to stay high, the report said.

The poor trading result from Speirs Foods prevented Speirs Group from paying a dividend to shareholders.