Canterbury Foods, which mainly makes catering sausages, pastries and beefburgers, plans to expand its halal, retail and ingredients operations in response to extreme pressure on profits.
The company reported a £2.6m loss after tax and interest last year on turnover that fell 2% to £48.6m.
It has restructured into an ingredients division and a pastry and meat products division and operates the first EFSIS accredited halal site in the UK at Stoke-on-Trent, making fast-food burgers. It appointed a halal operations director last December.
The company said that the past year had been particularly tough due to price rises for beef and pork and difficulties in the frozen catering sector generally. While the group's ingredients, pastry and sausage sales showed signs of improvement in 2004, its burger business fell by 10%.
Canterbury, which employs 550 people at six plants around the country and at its headquarters in Hull, is part way through a three-year restructuring involving a move into higher-margin business, as well as improving efficiency and cutting costs.
"Our top priority is to continue the rationalisation programme and expand our client base and thus the size and quality of our earnings," said chairman Christian Williams, who was appointed in December 2003 to lead a new management team.
Earlier this year, Canterbury Foods closed its factory at Hackney in London, moving frozen sausage production to Hull where £2.1m was invested and £750,000 spent on new spiral burger freezing facilities. The investment will also allow expansion of chilled sausage production for catering and retail.
Other investments have included £200,000 on acquiring land next to Canterbury's ingredients site at Bridgend and £170,000 on a pastry chilling facility, a cutting system and rapid cooling equipment at its pastry products factory at Sheppey in Kent.