Patties Foods commits to boosting R&D despite profit downgrade

Publicly listed frozen food company, Patties Foods, has downgraded its earnings forecast to a net profit after tax (NPAT) of $16.6 million for the year ending 30 June.

The company, which will announce its full year results in August, has blamed softer than expected market conditions, overall gross margin pressure and the “negative impact” from commissioning the installation of a new robotic pie packaging system.

The company said its NPAT would be around $17 million if the recurring bad debt of $411,000 after tax resulting from the administration last year of Australian Convenience Foods, a supplier of ready-made sandwiches, microwavable snacks and other products, was factored in.

Patties said it planned to continue to support and grow its brands, which include Four 'n Twenty, Herbert Adams and Nanna's, and would increase its research and develop resources to assist in “growing the pipeline of innovative new products and branded savoury initiatives”.

It also said it would focus on disciplined control of costs, on developing new domestic sales channels and improve manufacturing efficiencies, including the benefit of the completed automation project.