Board changes imminent at food producer

THE chairman and financial director of fresh food supplier Produce Investments are to step down before the end of the year.

As the company announced a 14 per cent increase in operating profits, it revealed that former Arla Foods chief executive Neil Davidson is to replace Brian Clapham later this month.

The Borders-based company saw its pre-tax profits hit by the costs of closing a packing house in Kent, and costs relating to a contamination issue.

In its annual accounts for the year-ending June 25, Mr Clapham noted the increase in operating profit, to £9.2 million, came as a result of improving how it gets its products to customers.

Revenue at the company, which supplies potatoes and daffodils to large retailers, was up four per cent to £185m.

Having been chairman for 10 years, leading the company to its flotation on the alternative investment market, Mr Clapham said the business had changed “a great deal” in his time and it was now appropriate to step down.

“I feel the business model is more resilient, more diverse and well-placed to handle any pressures that it might encounter,” he said.

In addition to Mr Clapham’s departure, finance director Brian Macdonald is also stepping down. He will leave the board at the end of the year, being replaced by current financial controller Jonathan Lamont.

A spokesman for the company said the departures were unrelated and were in not influenced by the contamination issue that led to a product recall at its Swancote Foods division.

The issue, which related to traces of metal being found in the some of the company’s products, led to an exceptional charge of £571,000.

The closure of its Kent packing house – which saw some volume moved to Scotland – led to an impairment charge of £2.6m and redundancy costs of about £1m.

The average yielding potato crop at the firm was down slightly to 4.3 tonnes, but chief executive Angus Armstrong noted that sales had stabilised.

“During the last financial year we announced we were working closely with one of our core retail customers to create a supply chain model that is more closely aligned to prevailing market conditions in any given season,” said Mr Armstrong.

The volume of produce that Produce Investments supplies to this customer has been cut, which Mr Armstrong said was “clearly a disappointment” but he added that a new three year supply deal had been reached.

Looking ahead, Mr Clapham said he expected crops to be in line with demand with pricing reflecting a balanced market in a retail environment that was “extremely competitive”.