Dawnfresh plans ‘significant investments’ despite posting another loss

Scottish seafood company Dawnfresh posted another financial year in the red for the period ending March 25, 2018, but is still planning further "significant" investments, including projects that will expand the group's offering of smoked and ready-to-eat products.

In its latest filing with UK Companies House, Dawnfresh reported a loss of £7.4 million (€8.2 million/$9.3 million) in 2018, slightly up from a loss of £7.7 million (€8.6 million/$9.7 million) a year earlier. Turnover dropped by 2.3 percent to £64 million (€71.1 million/$80.6 million), principally driven by customer mix changes in UK retail, down from £65.5 million (€72.8 million/$82.5 million) in 2017.

The company said 2018 was a year of “continued business transformation focused on factory standards and operational efficiency."

“This has driven significantly improved gross margins on a broadly static turnover, but despite this improvement, reported losses for the year remain similar to the previous year, improving slightly," the company wrote.

Export sales remained in line with the previous year, while at UK retail, the company saw a 22 percent increase in sales to its key strategic customer.

Gross margin was £4.7 million (€5.2 million/$5.9 million), up from £2.8 million (€3.1 million/$3.5 million) in the previous year, reflecting the continued careful management of product mix, and reduced cost of goods from operational efficiencies.

However, Dawnfresh’s cost base increased during the year with a focus on attracting higher caliber management to deliver audit standards, plan attainment, and “embed the infrastructure for the future growth which the group has now started to see.”

The company said its new product development program in both existing and new categories continued to grow with both existing and new customers.

“We expect this significant investment into [new product development] to continue into the 2018-2019 financial year and beyond and provide continued opportunities for profitable growth,” the company wrote.

Continued investments in farming, processing

During the year Dawnfresh continued to invest in its fixed assets and working capital of both its farming and processing businesses.

Capital expenditures were focused on efficiency improvements in farming and processing, the company said.

“Within farming we continued to invest in our people and fish husbandry and welfare standards to remain the largest global supplier of Scottish Loch Trout," the company wrote. “Our processing facilities at Uddingston and Arbroath will see significant investment to increase capacity in smoked products, and high care ready to eat products.”

Dawnfresh said focusing on growing both its chilled seafood processing and fish farming businesses will further enhance the reputation for the group and lay a foundation for growth.

“We are confident that the continued success of the business developments and growth will deliver a more positive result in the coming financial years,” said the company.