Patties Foods announced on Wednesday in an earnings update that its frozen berry recall is likely to cost its full year 2015 result $1.5 million in net profit after tax (NPAT), against a solid performance in Patties core savoury and sweet pastry business.
Managing director and CEO of Patties Foods Steven Chaur said that the company’s FY NPAT would fall to approximately $15.0m, due to the frozen berries recall and that it faces a year-end review of asset valuations.
“PFL’s core savour and sweet pastry brands continue their solid performance, despite significantly increasing meat prices,” he said.
The earnings update was based on actual management accounts until the end of April 2015 and sales for May 2015.
Patties Foods said during FY15 it had invested an additional $1.6 million in branded marketing activities, mainly in Four’N Twenty brand activation, successfully launched innovative new products, and accelerated continuous improvements at the Bairnsdale Bakery.
As well, Patties undertook a company-wide reorganisation to improve productivity, reduce complexity and decision making, expected to continue to deliver important future cost savings.
Patties announced on April 15 that after microbiological and viral testing of samples of recalled berry products, the results showed no detection of Hepatitis A or E.coli, and that every batch is now tested in Australia for HepA and E.coli.
“Nanna’s and Creative Gourmet berries are amongst the most rigorously microbiologically tested berries now sold in the Australian market,” Patties said.
Patties Foods said in a statement to the ASX in April that Victorian government health department testing of eight randomly selected Nanna’s packs taken from supermarkets revealed that for seven samples, hepatitis A was not detected. One packet did show up a trace amount of hepatitis A, however.