Meat and pastry products provider Canterbury Foods surpassed even its own expectations as it progressed through its restructuring programme. Having offloaded its vegetable and meat trading businesses, turnover (on continuing business) reached £49.4m - slightly above the £48.6m last year - and the company achieved its aim to produce a profit before tax, reorganisation costs and goodwill amortisation of £295,000 compared to a loss of £1m. Pre-tax losses on all operations fell from £5.8m to £2.4m. Gearing fell from 159% to 105%. Canterbury completed its first year of a three-year rationalisation programme ahead of schedule. As well as moving away from red meat goods, it closed its factory in Hackney and moved all its sausage manufacturing to Hull and reduced overheads by £1.6m. In spite of meat price hikes, improved sales mix and passing on the rising costs to customers enabled gross margins to increase 0.8%. Going forward, it will create more efficiencies on the meat side and will improve operations on the pastry and food ingredients subsidiaries. 'This is an important year for us,' says chief executive Paul Ainsworth, 'We will be making the move from being a frozen food producer to the food service industry to providing chilled and frozen foods to the food service and retail sectors.' House broker Teather & Greenwood has pencilled in a pre-tax profit of £1.2m for 2005. While much still needs to be done, the progress so far is very encouraging. A prospective p/e of 7.8, makes the shares attractive. Add for growth.
Market cap: £4.19m
PE Forecast: 7.8
Share price: 25.5p
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