14 February 2001
 Armitage Blames Strong Pound And Superstores |
Armitage Brothers Plc
the UK manufacturer and distributor of pet products including Wafcol premium dog
foods has announced a 5.7% drop in sales.
The figures presented today in a report by Armitage's Chairman D.L.J. Crawley, were for the period May to December last year compared with 1999. Nottingham based Armitage Bros, which employs 350 people, also produces aquatic products under the Algarde, Phoenix and Nimrod brands. In August last year Armitage disposed of its wholesale division, Aitchisons, to Zoa Corporation plc (parent company of Woodpecker Pet Products) for £1,150,000 (including £150,000 deferred until April 2001), following publication of poor results for the year to end of May 2000. These latest figures have been blamed on teething problems arising from a major upgrading of the Wafcol plant and deflationary pricing. These were countermanded by strong sales growth in aquatics due to the introduction of a number of new product lines. The company reports a profit (before tax) for the same period of £766,000 with margins again hit by work on the extrusion line at Wafcol but also affected by UK currency, with export sales remaining under pressure due to the strength of the pound. The report also quotes 'product and customer mix' as a factor affecting profits. This refers to a greater proportion of the pet market in the UK being taken over by major grocery and pet superstore chains. The report states that: "the general pet trade is gradually losing market share and as a consequence the consolidation of wholesalers is taking place to ensure their survival in this changing world". During recent weeks Armitage stock (to the beginning of this month) had risen 6.1% Zoa Corporation plc Based in Croydon and trading under the Woodpecker name, the Zoa Corporation is the major player in the wholesale and distribution of pet foods and pet accessories to the independent pet product retail market in the UK. In July last year trading in shares in Zoa on the Alternative Investment Market, (AIM), were suspended when the English Trust Company Ltd. ceased to act as nominated advisor for the company. Zoa subsequently appointed brokers Seymour Pierce Limited to act for them. Zoa had been involved in a takeover bid for Gibbs Palmer (Holdings) until negotiations failed in the autumn and the company (Gibbs) collapsed. As part of its announced strategy of acquisition, Zoa also recently bought Trophy Animal Feeds from Sevenoaks Animal Feeds Limited, (£431,000), Eldon Pet Supplies, (£850,000) and Compass Pet Products Limited, (Compass was purchased for £1.3 million in cash last August). As of yesterday John Aviss, who announced his move to Chief Executive from Executive Chairman on 6th December, remained the major shareholder in the company with almost 55% of the issued capital having just sold one million of his 24 million shares at 14p per share (currently trading at 16.5p). On 25 January, Zoa reported sales up 67% from £13.5 million to £26.2 million and an operating profit up from £288,000 to £611,000. However Zoa's share price has been struggling over the past year. In 2000 shares peaked at 36.5p in March. This article may be reproduced with permission of the author and correct attribution to the source. |