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Patties grows profit after berries exit

AAP logoAAP 19/08/2016 Petrina Berry

Patties Foods' increased focus on pies after offloading its embattled frozen berries business has put it in a stronger financial position ahead a likely takeover by private equity.

Patties made a net profit of $13 million in the year to June 30, up from $2.1 million a year ago, when its recall of frozen berries contributed to a financial hit of more than $13 million.

Revenue fell five per cent to $245 million in 2015/16 due to the impact of its sale of its Creative Gourment frozen fruit business, and exit from its Nanna's frozen fruit products.

The company recalled Creative Gourmet and Nanna's frozen berry products in February 2015 amid a hepatitis A scare, and while tests returned negative results, the recall severely dented its profit.

Revenue from its bakery division, which makes Four 'N Twenty, Herbert Adams and Nanna's pies, lifted five per cent in 2015/16 to $233.5 million, as sales improved.

"The decision to comprehensively restructure the business 12 months ago continues to deliver effective cost control and operational efficiency improvements," chairman Mark Smith said.

Revenue from the Four'N Twenty brand rose 13 per cent, Herbert Adams grew 12 per cent, Nanna's frozen desserts rose 12 per cent, and Patties branded frozen party food lifted six per cent during 2015/16.

Patties shareholders are meeting next week to vote on a $230 million takeover offer from Pacific Equity Partners, which the company's directors have unanimously recommended be approved.

PATTIES COOKS UP STRONG PROFIT GROWTH

* Net profit of $13m, up from $2.1m

* Revenue down 4.6pct to $245.1m

* No final dividend, pending takeover over

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