Cedenco serves up record profit

By Phil Boeyen, ShareChat Business News Editor

Tuesday 8th May 2001

Cedenco Foods (NZSE: CED) has posted a record interim profit on the back of a big jump in sales.

For the six months ended March the company made a profit of $2.4 million, a six-fold improvement on last year's interim result of $400,000.

Sales revenue trebled from $4 million to $11.9 million.

The company says the increased revenue is largely due a new frozen foods plant in Gisborne and increased vegetable powder sales.

MD, Dean Witters, says the company's New Zealand operation continues to be expand and diversify its products, processes and customer base.

"This is most evident in the powder products with increased demand from new and existing customers for sweetcorn and pumpkin powders in the Asian markets.

"This increased demand reflects our ability to produce consistently high quality products at competitive pricing."

Cedenco is picking full year earnings after tax to grow by 58% to $3.8 million or 25 cents per share.

Its tomato processing investment in Australia is also showing improved profitability although Mr Witters says important structural issues remain to be resolved for the business's potential to be achieved.

The company yesterday confirmed that California-based SK Foods has acquired a majority holding and it will be looking to utilise its new shareholder's experience and market synergies to advantage further growth.

No interim dividend has been declared.

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