Findus hopes to be in black within year

Oct 8 2008 by Graeme King, The Journal

THE high-flying Norwegian entrepreneur who bought a Tyneside frozen food factory three years ago says the business is about to make its first profit.

The Findus factory in Longbenton was bought from a Swedish private equity firm in April 2005 by Geir Frantzen, a former senior manager at the Findus parent group.

In its first year it lost £5m, in 2006 that was cut to £2.5m and despite seeing its turnover soar by 20%, up to £32.8m in 2007, the company still lost £937,000.

Managing director Vidar Engen, 40, told nebusiness he expected turnover to rise this year – up to £36m – but although soaring cost of fuel and rising commodity prices meant it was unlikely to make a profit this year, it would hit the black next year.

Mr Engen said: “The plant has a sustainable, profitable future. It has been a tough road and it has taken a bit longer than anticipated. But we are growing and we will break even with in the next eight months.”

The plant’s improving turnover is being driven by a focus on developing its core frozen food range in the United Kingdom and Ireland and adding new brands.

It makes crispy pancakes, frozen fish, French bread and frozen pasta for most of the country’s main retailers.

Mr Engen said: “We have grown our UK sales by 27% in our home markets, we are now the number one brand in the UK and our investment in our brands is going well.

“We had hoped to make a profit before now, but this has been a difficult year for rising prises and we have not been able to recover that from the retailers, with the squeeze on family budgets.

“All manufacturers, no matter what the sector, are feeling the pinch. For us not only are there high energy prices, there are the rising prices of beef, flour and other ingredients to factor in.”

The buyout from EQT saw Mr Frantzen obtain the rights Findus brand for the UK and Ireland. The Findus brand had been launched in Sweden in 1945. In 1962, the Findus brand was sold to Nestlé and in January 2000 it was bought by EQT.

Earlier this year some of the 425 workers at the Longbenton plant went on strike over a scheme to shut down for two weeks in the summer.

Mr Engen said: “This has now been resolved, it was partly due with issues that dated back to when the company was owned by Nestlé.

“But as a result of this process with the workforce I believe we have a much better and stronger relationship with the workers.”