UK snack and bakery company Lees Foods said it is “considering the future position” of its Patisserie UK subsidiary following a disappointing 2008 performance.
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In a trading update today (11 February), chairman and managing director Raymond Miquel said the disappointing performance was primarily down to the loss of major UK customer Woolworths plc.
“The directors are considering [the business’s] future position within the Lees Group and will make a further announcement in due course,” Miquel said.
Due to the collapse of Woolworths, Lees said it had to make a full provision for a bad debt, the net effect of which is GBP69,000 (US$99,410). Although a one-off amount, Lees said it will consequently reduce net profit for the year end.
Despite this, the company said its Lees of Scotland and Waverley Bakery businesses achieved “record levels” of sales turnover for the 2008 fiscal year.
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By GlobalDataFor the period ended 31 December, the company reported a “strong” performance given the current economic environment, resulting in group sales being in line with expectations.
Lees said underlying profit was also in line with market expectations, despite having to absorb “substantial” raw material and power cost increases during the year.
