Factory investments, better branding boost profits for UK fish supplier

Company grew its customer base 12.5% during the year.

UK seafood supplier Sykes Seafoods reported a significant increase in its earnings in 2016 as factory investments and saving initiatives started paying off.

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The Liverpool-headquartered company's net profit rocketed from £339,000 (€390,358/$419,546) to £6.1 million (€7 million/$7.5 million) year-on-year, while earnings before interest, taxes, depreciation and amortization (EBITDA) jumped 430 percent to more than £6.6 million (€7.6 million/$8.2 million).

Gross profit for the year reached £15.2 million (€17.5 million/$18.8 million), which was up from £10.5 million (€12.1 million/$13 million) reported a year prior.

Turnover grew 8.8 percent from £88.5 million (€101.9 million/$109.5 million) to £96.3 million (€110.9 million/$119.2 million) year-on-year.

A combination of investments into the management team and a new sales team in London, as well as "state-of-the-art manufacturing and processing facilities" resulted in an increase in orders from both new and existing customers, Alan Dale, managing director of Sykes Seafoods, wrote in the annual report.

Investments into the group's own-brand portfolio -- Arctic Royal, Clear Seas and Glenmyr -- has driven a product shift, which resulted in an increase in gross margin percentage from 11.9 to 15.9 percent.  

Growth came from the UK retail market in particular, where discounters are Sykes' key retail customer base. Sales of both branded and private label products jumped 34 percent year-on-year.

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The company also continued to grow in foodservice sales, with a 14 percent increase in turnover from that segment year-on-year.

Overall, Sykes grew its customer count 12.5 percent in the year.

"Demand for fish and seafood across all of the group's key market sectors is buoyant, and is forecast to continue to prosper in coming years, which is already evident from a strong pipeline and order book going into 2017," Dale said.

The way Sykes marketed its products has been given more importance, he said. The company launched a new website, company literature in 2016 and focused on increased promotional activity.

"We enter 2017 with over 80 percent of the products we supply to both foodservice and retail markets supported by our own group brands, which we view as a key differentiator and growth opportunity for the coming years," Dale stated.

During the year, the group also renegotiated its banking arrangements and moved to HSBC. This will provide further funds for future investments and potential acquisitions, he said.

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