Product Quality Product quality is a key strength of the Group and failure to maintain a high standard of food quality and safety would have a severe impact on service levels and customer relationships. The Group’s quality assurance procedures, managed at site level, are reviewed continuously with improvements made as appropriate. The Group’s Technical Director helps provide focus to ensure there is continuous improvement across all sites to meet the increasingly high expectations of our customers. The operating subsidiaries are subject to regular internal and independent food safety and quality control audits including those carried out by, or on behalf of, our customers. The Group maintains product recall insurance cover to mitigate the potential impact of such an occurrence.


Labour Costs, Prices and Supply Increases in labour costs, for example as a result of the national living wage, the impact of the price and volatility of price of raw materials, along with increasing costs of utilities can impact the core profitability of the business. Furthermore, the prices of certain key commodities (e.g. sugar) are tied to the Euro – the relative strength of sterling and future volatility within the Eurozone will have an impact on the cost of these commodities. Any related shortage in supply of raw materials will impact the business’s ability to maintain its service levels to customers – another of its key performance indicators.


The Group maintains a high level of expertise in its buying team and will consider long-term contracts where appropriate to reduce uncertainty in input prices. The team also cultivates strong relationships with major suppliers to ensure continuity of supply at competitive prices. Regular renovation and innovation in our product range can help to manage margin pressures in an effective manner as far as the competitive environment allows. The Group also purchases forward foreign currency in order to minimise the fluctuation of input costs linked to future currency conversion rates. The Group invests in site capabilities such as leading edge robotics to increase efficiency and effectively manage costs.


Economic Environment The economic environment remains challenging, with consumer behaviour changing and a shift toward value-oriented discounters. Affordability for consumers is essential, the Group will continue to focus on quality and value for money. Innovation and development of products that stand out from the crowd help maintain strong relationships with customers and licensors. We are driven by a passion to meet consumer expectations at affordable quality.


Trading Results Continuing Group revenue for the 52 week period to 27 June 2015 was £256.2 million (2014: £175.7 million).


Operating Profit margins were 4.8% (2014: 4.4%). Capital investment, improvement in operational efficiency and product mix are the main drivers for the improvement in margin. Inflationary increases and employee pay rises have been offset by operational improvements and returns from capital investment. Administrative expenses have increased, driven by acquired businesses and through increased retailer marketing support, new product development, range support, remuneration for outperformance of targets and improvements in the fabric of the workplace.


Dividend Subject to shareholder approval at the Company’s AGM on 25 November 2015, the final dividend of 1.67 pence per share will be paid on 10 December 2015 to shareholders on the register at 13 November 2015 and will be recognised in the financial year ending 2 July 2016.


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