Nomad Foods reports £392M loss as empire grows

The loss, after tax, was blamed on costs linked to the acquisition of Iglo Group, purchase accounting adjustments and “non-cash founder shares valuation charge”.

The results came after Nomad Foods agreed to buy the continental Europe operations of Findus Group for about £500M earlier this month as part of its ambition to build a frozen food giant.

‘Other potential acquisitions’

Nomad Foods co-founder billionaire Noam Gottesman said the company had a strong platform to consolidate the “fragmented” global food sector.

“The Iglo acquisition is performing as expected and we are excited about other potential acquisitions opportunities that meet our criteria of being market leaders in niche markets and having a long history of strong free cash flow generation,” Gottesman said

 “As an example, we recently entered into an agreement to acquire Findus, one of Europe's largest frozen food and seafood companies with leading brands in the Nordic region as well as Southern Europe.”

There was a 2.4% net revenue decline year-on-year in the six months to June 30. But the gross margin stayed broadly flat despite higher investment in promotional marketing, according to results released on Thursday (August 27).

Nomad Foods chief executive officer Stéfan Descheemaeker said the company has selectively increased promotion levels while maintaining “rigorous control” of the cost base.   

‘Difficult retail environment’

"Overall, results were in line with our expectations at the time of the acquisition, taking into account the difficult retail environment in Iglo Group's core geographies,” he said. 

“As we look to the future, we believe Nomad is well positioned to take advantage of numerous growth opportunities across Western Europe and globally, not only within the frozen food category, but also within the broader packaged food space." 

Nomad Foods completed the acquisition of Iglo Group, which boasts frozen food brand Birds Eye, for about £1.87bn (€2.6bn) in June. 

In July the company placed more than 15.4M shares, raising a gross proceeds of £207M ($320M) to fund future acquisitions. The deal with Findus was agreed earlier this month.