Patties Foods managing director Steven Chaur. Photo: Paul JeffersPIE maker Patties Foods Limited says it will not pay out a dividend as it fears a hit to its bottom line in the fallout from a Hepatitis A scare from its berry products.
Nanjing Night Net

On Tuesday the company reported a fall in net profit of 6.1 per cent from $8.8 million to $8.2 million in the six months to December 31.

The company, which recalled Nanna’s mixed berry products a week ago after a number of Australians fell ill from eating the imported berries, reported an earnings before interest, tax, depreciation and amortisation (EBITDA) of $16.9 million for the six months to December 31, down 6.2pc.

But the company said its underlying net profit after tax (NPAT) was $9 million, a rise of 3pc, was in line with its previous market guidance.

“Due to the current uncertainties around the potential but as yet unknown effects resulting from the voluntary frozen berries recall, the board has prudently determined to defer consideration of an interim dividend until matters and their financial impacts become clearer,” the company said in a statement on Tuesday.

It also reported a rise in revenue of 9pc, to $138.1 million.

Patties chairman Mark Smith said tests were currently being conducted to identify a link with the Hepatitis A outbreak and the Nanna’s berries product.

“Patties is acting in full co-operation with the State and federal health authorities, the department of agriculture and Food Standards Australia New Zealand (FSANZ).

“Whilst the source of the Hepatitis A virus is still unconfirmed, further detailed tests are being conducted by Patties Foods and the relevant authorities,” he said.

The company would pay no dividend this half, compared with 3.2c paid in the first half of the 2014 financial year.

Managing director Steven Chaur said the results were in line with the business strategy which was in a “restore basic conditions” phase.

“Of significance in the first half was our decision to comprehensively reorganise the Patties Foods business structure,” he said.

“Although this strategic organisational review did result in restructuring costs, the key focus was to improve our decision making processes, speed to market on innovation, reduce business complexity, increase productivity and to reduce our fixed cost base,” he said.

The company said it expected revenue to increase in the second half as it rolls out new pie products, but the financial impact of the voluntary recall was impossible to ascertain, “although it is possible that ultimately the impact could prove to be material”.

Patties Foods shares fell 4pc to $1.20 at 10.15am AEDT on Tuesday.

This story Administrator ready to work first appeared on Nanjing Night Net.