A BUSINESS in the fresh potato and daffodil sectors, with operations in Scotland, has said that it expects the group’s annual profit to be “substantially below current market expectations” due to unseasonal weather.
Produce Investments, an AIM-listed group, which includes Greenvale AP, a potato grower with a fresh packing site in Duns in Berwickshire, and Greenvale Seed, a grower and supplier of seed potatoes based in Blairgowrie in Perthshire, yesterday pointed to a number of factors impacting its profits in a trading update.
In its interim results announcement on 22 March 2018, the board of Produce Investments highlighted the potential impact of the unseasonal spring weather, particularly on the businesses of Jersey and Rowe in Cornwall.
It said the adverse weather presented significant challenges both to planting of its early season potato crops in Cornwall and Jersey and also to the harvesting of its daffodil crop because of high rainfall and low temperatures. The group said this does not impact its Scottish operations which employ 240 people.
Produce Investments said: “As a result of these factors, as well as the previously flagged lower margins on 2017 UK potato crops and reduced seed volumes and margins due to an oversupplied UK market, the board now expect the group's profit for the year ending 30th June 2018 to be substantially below current market expectations.”
While it is too early to quantify, the board added that it would expect a significant "non-cash" impairment which will reduce "unadjusted" reported profits for the year.
The board added that in light of the timing of the potato harvest on Jersey, the board has decided that it would make sense to move the year end to the end of August from the beginning of the next financial year at the earliest, subject to regulatory approval.
The group said it “remains cash generative and is committed to its long-term strategy of widening both its product base and customer base, creating a more diverse business model for the future”.
Its share price was down nearly eight per cent at 151p.
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