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Seachill’s operating profits soar as 2016 results are published

GRIMSBY seafood giant Icelandic Seachill has posted strong annual trading results, with operating profits up 41 per cent to £5.5 million.

Seachill’s operating profits soar as 2016 results are published

The company behind the Saucy Fish Co brand and much of Tesco’s chilled and coated products saw sales up 7 per cent to £266.3 million.

It comes as negotiations continue with a potential buyer, understood to be Britain’s Hilton Food Group, while 2017’s performance further builds on last year’s success.

Stating it had successfully navigated “the headwinds of extreme raw material inflation and currency uncertainty” following the Brexit vote, Simon Smith, chief executive, said: “I am delighted to say that the business has made excellent progress over the last few years and I’d like to thank all our colleagues and partners for their role in delivering success for Seachill and our partner customers and suppliers.”

He would be not be drawn on the sale process, but outlined key highlights in the trading year reported on, good news for the 1,400 staff across two sites at the entrance to the town.

It was a period that saw a long term agreement signed with Britain’s leading supermarket chain, and the business refinanced on more favourable terms. 

As reported in the 2015 results a year ago, Tesco’s resurgence was in part credited with Seachill’s performance turnaround, as it went from a £3 million operating loss to a £4.3 million profit. That business has now been secured, with new products flying.

New customers were also brought in by the company, while the ending of the long term relationship with Marks and Spencer, as extensively reported, was “executed in a controlled manner”, starting in September last year with final production in November.

Before one-off restructuring costs of £3.1 million, the business showed solid operating profit growth, up £1.6 million on 2015.

Highlights included the January 2016 start of business with a new customer contract on “wetfish” under a multi-year agreement, “allowing the business to have a very strong beginning to the year,” Mr Smith said. In April 2016 a new fishcake contract began with the largest customer, Tesco, following a significant capital investment in class leading technology. 

“The sales grew throughout the year and that growth is anticipated to continue during 2017,” he said.

May saw the break down in the Marks and Spencer contract, but August brought the signing of the long term agreement with Tesco, just ahead of the 2015 results release. Then Mr Smith said that 2016 and 2017 were looking like strong growth years, as Saucy was also firmly established in export markets in the US and Canada.

Today, Mr Smith said: “In 2017 Seachill has continued its successful strategy and business performance. Seachill continues to partner with like-minded strategic customers and suppliers to deliver sustainable business success. 

“After eight months trading, underlying business continues to meet expectations and perform ahead of 2016. The strategy to develop new business customers and sectors has been delivered faster than originally forecast with significant market share growth being experienced by Seachill’s customers in coated fish and fish cakes. Performance of new business has resulted in a further increase in EBITDA expectations for 2017.”

This year has seen the deli site, on Grimsby’s South Humberside Industrial Estate, offloaded, with Seagold, trading under the Ice Fresh brand, taking over. 

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