Business

£600,000 of Mash Direct stock bound for US supermarkets forced to be written off

Mash Direct revealed that it was forced to write-off more than £600,000 worth of stock bound for the US after a major supermarket listing was postponed
Gary McDonald Business Editor

COMBER agri-food firm Mash Direct has taken a financial hit of more than £600,000 after stock destined for shelves in America was written off.

Fresh mashed potatoes and a range of other locally-grown vegetable side dishes were earmarked to go on sale at a number of supermarkets in New York, New Jersey and Pennsylvania owned by a major US co-operative with $2 billion-plus annual sales.

But one part of the supply chain kept postponing its launch over a period of a year and a half, and food sent from Comber was eventually handed out to the needy.

And although Mash Direct felt it has legitimate claims to seek legal redress, it revealed it has opted to absorb the loss.

The loss of £609,743 worth of stock is highlighted in the company's annual accounts, and is shown to have severely impacted on Mash Direct's bottom line in its trading year to February 2019.

Mash Direct continued to perform well otherwise, with sales increasing by nearly 9 per cent from £16.9 million to £18.4 million, and gross profit lifting from £6.2m to £6.6m.

But the financial performance was adversely affected by that exceptional write-off of stock, and retained profit after tax reduced to £191,177 from £656,162 last time.

The company is run by family team Martin, Tracy, Lance and Jack Hamilton.

Director Jack Hamilton told the Irish News: "It's always a risk when you try to enter new markets, and given the nature of retail in the US, it makes it even more difficult.

"On that exceptional loss, it was simply a case of the supply chain breaking down at their side.

"Yes, we might have gone down the litigation route to get the money back, but decided to put it all down to experience and take the hit on the chin."

He added: "Mash Direct has already broken all trading records in the current trading year, and we've found growth elsewhere."

The accounts show that the number of primary produce suppliers partnering the business rose from 67 to 79 over the year, while its payroll increased from 186 to 203 as the result of its increased levels of turnover.

That pushed up staffing costs from nearly £3.6m to £4.1m, with directors' remuneration rising from £142,000 to £170,000.

Founded in 2004 (though with a farming history stretching back to the early 1800s), Mash Direct grows and produces quality, convenient field to fork product which are sold in 8,900 stores including multinationals like Asda, Tesco, Sainsbury's, Morrisons and Waitrose.

Last year its retail sales were up 10.3 per cent in Britain, where foodservice and food manufacture exports grew by 39.7 per cent. Sales to the Republic of Ireland increased by 8.7 per cent.

Mash Direct, which has amassed 22 Great Taste awards, claims to have sold 35 packs every minute in 2018.

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