Profit before taxes dropped 65% from £9.4M to £3.26M in the year ending December 31 2016. Tangerine’s operating profit also fell to £5.6M, almost half that achieved the previous year.
The company’s fall in profits reflected its fall in sales, which were worth £139.3M last year – down £12.6M compared with sales in 2015.
The UK was the firm’s biggest market, accounting for sales of £128.2M, while sales in Europe came to £5.98M. Sales to the rest of the world were worth £5.03M, up £1.01M compared with the previous year.
Tangerine’s former popcorn brand Butterkist – sold to KP snack earlier this year – saw a strong sales performance, as well as its branded sugar and international business.
Impacted by a reduction of contracts
However, its retailer own-label business was hit by the loss of key contracts and, in some cases, the removal of confectionery from store till points.
In the company’s statement, Tangerine’s ceo Anthony Francheterre said high exchange rates at the end of 2015 and the first half of 2016 resulted in increased competition from European suppliers.
He also identified uncertainties caused by the debate on sugar as a challenge for the business, which led to reduced promotion of sweets in the trade.
Francheterre added: “The market is expected to continue to be extremely competitive in 2017 and the growing debate on the cost of obesity will undoubtedly impact on the business.
“However, the directors are confident that the company’s investment in new product development and its philosophy to be a responsible supplier will allow Tangerine to grow its business and maintain its position in the confectionery and popcorn market in the future.”
Production difficulties
Tangerine also faced production difficulties at the start of last year, following the closure the closure of its Blackpool factory in March 2015. The company spent £6M last year on projects to increase capacity and efficiency of all of its sites.
Total staff at the company fell 3.4% to 1,448 across the whole business. This represented the loss of 48 production staff from the business.
Meanwhile, Confectionery manufacturer Hotel Chocolat reported sweet success in preliminary results for the year ending July 1 2017, after profit doubled.
Profit before tax was up 100% for the company to £11.2M, while profit after tax grew to £8.8M – 115% higher than the previous year.