Potato firm E Park & Sons has vastly increased its profit on a reduced turnover, facilitated by “good growing conditions” and “greater efficiencies”.
The Cheshire-based business made a pre-tax profit of £5.8 million in the financial year ending 30 June 2014, according to accounts posted at Companies House.
That was a vast improvement on last year’s pre-tax profit of £1.2m, which was achieved on a turnover of £49.5m. E Park & Sons’ turnover in the most recent financial year, though, was £43.3m.
Speaking in the report accompanying the accounts, company director Lynne Arnot said: “The company has enjoyed a year of falling raw material prices which has had an effect on both sales revenue and cost of sales, and has resulted in an increase in gross margin.
“The good growing conditions during the 2013-14 season produced a plentiful supply of good quality, lower-priced UK potatoes, and this has contibuted to the profit for the year.”
Arnot also pinpointed “greater efficiencies” as helping gain increased profitability, resulting from investment in new equipment and production methods.
However, she warned that an oversupply of potatoes and lower prices will drive growers out of the market in the long term, resulting in a lack of product for future seasons.
Arnot also cautioned that E Park & Sons is operating to guard itself against the increasing preference of supermarkets to take their packing operations in-house, and the short-term nature of retail supply contracts, albeit noting that E Park & Sons has taken steps to mitigate against any potential loss of turnover on this front.
The firm hasn’t been resting on its laurels since June 2014. E Park & Sons has secured “another blue chip customer”, and is talking with existing and new customers to expand its market share.
A chunk of the profit made in the most recent financial year has also been ploughed back into the company by means of continued investment in plant and equipment, aimed at further cutting labour costs and boosting efficiencies.
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