Cost cutting offsets revenue drop for Norish

Norish on Friday reported an increase in annual profit as cost cutting measures more than offset the impact of lower revenue.

For the year ended 31 December, the cold storage company recorded a profit before tax of £1.9m, an 18% improvement over the year before, after cost of sales was reduced by 14% to £33.9m.

The AIM traded company said labour costs were down 5% while power costs were down by 10% due to the reduced blast freezing activities.

Revenue fell by 12% to £36.8m after a reduction in blast freezing volumes, with revenues in the sourcing division falling by 18% to £22.5m as Townview Foods mainly accounted for decreased sales.

At 31 December, Norish had cash and cash equivalents of £1.5m, roughly unchanged from the same point the year beforehand, while its final and total dividend had increased by 9% to 1.80 €cent.

Looking to the future, the business said it anticipated “strong profit growth” in 2019 despite volatility in underlying markets after its cold storage division got off to a good start.

Ted O’Neill, chairman of Norish, said: “It is difficult to pin point any direct impacts from the ongoing Brexit discussions other than to say they are hardly positive for business generally. However, our balance sheet is in excellent shape and leaves us well positioned to benefit from any disruption and consequent opportunity which may arise.”

Norish’s shares were up 1.54% at 66.00p at 1054 GMT.