SPC back to profit in $29m rebound

SPC – known for its canned tomatoes, baked beans and preserved fruit – has swung to an annual profit, completing a $29m turnaround, three years after Coca-Cola Amatil sold it as a loss-making business.

The century-old cannery booked a $14m pre-tax profit in the 12 months to June 30, compared with a $15m loss under its previous owners.

But chairman Hussein Rifai – whose Perpetuity Capital teamed up with Sydney private equity firm The Eights to buy SPC for $40m, a fraction of the $750m Coca-Cola Amatil paid in 2005 – says good management, rather than the pandemic, catapulted the company back into the black.

“If I was to put my finger on one thing, it was really just getting rid of the three layers of management and bringing in a pretty qualified, highly motivated layer of new management,” Mr Rifai said.

“And I’ve given them a piece of the action. Day one, we announced we gave 15 per cent of the company to management, so they became our partners and their heart is in the business as much as ours.”

Since the acquisition, SPC’s new owners have invested about $35m in new information technology, rationalising old and non-performing assets, improving production efficiency and its cost of goods.

But the past three years proved tougher than Mr Rifai initially expected. While the onslaught of Covid-19 triggered a wave of pandemic buying, with non-perishable goods such as pasta and SPC’s range of canned goods disappearing off supermarket shelves, it presented a big problem for the company.

“Covid didn’t really help us because we don’t have a continuous supply chain. We are a seasonal business and in 2020 we bought all the fruit that we thought we could sell and then everybody bought everything in the first half of the year,” Mr Rifai.

“It’s not like we can call our suppliers and say ‘business is good, send me more’, so we ended up missing out on business at the tail end of the year. This (earnings) result is despite all the difficulties, not with the help of the pandemic.”