Tallaght-based biscuit manufacturer, W & R Jacob, is looking for a strong recovery this year following the pre-tax loss of £2,653,000 incurred in 1996. This contrasted with the profit of £4,644,000 in 1995. The loss in 1996 was entirely due to rationalisation provisions. The managing director, Mr Bill McConnell, told The Irish Times that the results are "considerably better" this year. Volume sales are slightly better and the cost base is lower following the rationalisation programme.
Asked about the move towards own labels following the expansion of British retailers into the Irish market, he conceded the move will have an "impact". However, the group views it as "an opportunity". Jacob's new range of Chocolate Kimberley has been performing very well on the domestic market. There are now plans to launch the range onto the British and French markets early next year. The group, which was purchased by the French food group, Danone, in 1991, is optimist about future sales of the new biscuit.
The Jacob results, published in the latest edition of Private Research, show exceptional provisions of £6,475,000, reflecting the rationalisation programme. The plan was to reduce employment from 700 to 550. The programme has been almost completed with employment down to 600. This, Mr McConnell said, has led to more investment in the business. Apart from labour reductions, the rationalisation programme consisted of new work practices and commissioning new equipment. Redundancy payments came to £1,116,400.
Excluding the exceptional provisions, the operating profit fell from £5,638,000 to £3,739,000. Mr McConnell said virtually all of the reduction was due to the adverse translation of sterling into pounds. Gross profits showed a marginal increase from £36.3 million to £36.4 million. Dividend payments to Danone were reduced from £5,118,000 to £3,518,000 which had to be paid out of reserves. Sales grew marginally, from £83.4 million to £84.4 million. Volume growth amounted to 2 per cent.
