Grower’s 2011 losses

A large East Anglian grower has moved to reassure staff, suppliers and customers that the business has achieved a turnaround in the past year, despite 2010/11 losses.

Produce World, which is based in Peterborough and operates across the region, reported losses of �11.6million for the year to June 30, 2011, due to a normal trading loss of around �3.6m and an exceptional loss of some �8m incurred by Produce World Marshalls. The losses were put down to difficult trading conditions and restructuring after the acquisition of Marshalls. CEO William Burgess said they were historic losses and the results so far this year were good.

“Over the past few days we have been meeting with staff, suppliers, and customers to explain how these exceptional losses have occurred. We told them about the dramatic turnaround we have achieved in the past 12 months and that the business is now making a profit,” he said.

“These historic losses do not affect the trading position of the business today. In fact, the results for the first half of this financial year are good with the group trading profitably, and Produce World Marshalls has been one of the driving forces behind this much improved financial performance for the Group during 2011/12.”

The trading losses came about as a result of difficult market conditions and costs associated with the ongoing restructuring of the business following the acquisition of Marshalls, the company said.

The exceptional costs were discovered following a review of Produce World Marshalls internal accounting systems. Initial concerns from the Group management were followed up by investigations carried out by PriceWaterhouseCoopers, and these confirmed that there had been errors in the internal accounting procedures going back over a number of years.

As a result ,the Produce World board decided to accept an exceptional loss of �8m during the year to end of June 2011.

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Mr Burgess said: “Having resolved this issue the Produce World Group can move on in confidence. Barclays Bank - which has been the group’s bank since its foundation - continues to be supportive of the business. We can assure our customers and suppliers that it will not affect our commercial relationships with them or our ability to continue to provide quality UK and overseas produce to the market.

“While our restructuring of the group to meet the needs of the market place continues, there will be no redundancies in the UK directly attributable to these losses.”

The group says that since taking over Marshalls, the Produce World Group has applied its business principles in order to turn it into a leading-edge brassica supplier marketing top quality produce with improved shelf-life at competitive prices.

“As a group, Produce World now have a board of directors in place which has considerable experience both within and outside the fresh produce industry. This will enable the company to move forward with confidence,” it adds.