One of Britain’s biggest potato producers, Branston, saw profits fall this year after lower prices hit margins.
The Lincolnshire-based company, which produces around 350,000 tonnes of potatoes a year, saw turnover fall seven per cent in the 2017/18 financial year, despite volumes increasing marginally by 1 per cent.
According to Branston’s annual results the turnover decrease was “driven by lower raw material costs characterised by a free-buy market operating consistently below contract pricing”.
Turnover fell to £133.6m, down £10m on the previous year, with operating profit and profit before tax both coming in at £4.4m.
Managing director James Truscott said: "The 2017/18 season was one of very low potato prices driven by a large harvest. In our business that naturally flows through to downward pressure on our sales revenue and associated activities.
"This combined with a notable drop in volumes during the exceptionally hot summer period, reduced the net profits for the year.”
Branston remains confident however that its business strategy will pay off going forward. According to its annual report: “The company continues to place customer service at the head of its schedule of corporate objectives, and this strategy of providing superior service, alongside a competitive purchasing policy, will drive the company towards its anticipated future success.”
The company stated it had avoided any financial fallout from Brexit, although noted that labour shortages and weak exchange rates were problematic.
“To date the impact of the Brext decision in 2016 has not had a material financial impact on the company. The Board will monitor relevant metrics going forward, labour availability and the value of the pound against the Euro being most critical in the short to medium term.”