Business

Salad days for Avondale as sales rise after supermarket deals

Colin Ferguson, head of sales in Ireland for Avondale Foods, and Asda's Brian Conway at a previous supply announcement between the firms
Colin Ferguson, head of sales in Ireland for Avondale Foods, and Asda's Brian Conway at a previous supply announcement between the firms Colin Ferguson, head of sales in Ireland for Avondale Foods, and Asda's Brian Conway at a previous supply announcement between the firms

SALES have risen at Co Armagh food firm Avondale in a year in which it signed off on a number of major supply deals with multinational supermarket chains including Asda.

Avondale Foods, founded by brothers Harry and Derek Geddis in 1965 and employing more than 440 staff, reported a record turnover of £51.5 million in the year to March 31.

But pre-tax profits at the company - a UK and Irish market leader in fresh packaged food produce - dipped from £4.5 million in 2017 to £2.6 million last year, with gross profit percentage falling from 20 per cent to 17 per cent.

Based just outside Lurgan, Avondale Foods manufactures vegetable accompaniments, wet salads such as coleslaw and potato salad, fresh soups, sauces, dough balls, porridge and noodles for distribution throughout the UK and Ireland.

The company trades under its own brand name Country Kitchen, but also makes products sold under brand names agreed with major supermarkets including Sainsbury's, Asda, Tesco, Waitrose and Marks & Spencer.

In its latest accounts filed at Companies House, Avondale lauds a period of sustained growth, which included adding 41 new production staff and taking its payroll from 402 to 443. That in turn bumped up its wages bill from £9.5m to £10.6m.

The directors said: "This financial year has seen the continuation of a significant investment regime in the company, increasing capacity and making ready for new product opportunities in line with the company's strategic goals."

However, a strategic report accompanying the accounts adds that factors affecting performance include pressure from customers to reduce prices, maintaining supply of high quality ingredients during seasonal changes and in varying climates, higher operating costs, and currency fluctuations between sterling and the euro.

The company, which benefited from £1.2m in government grants during 2017/18, had year-end net assets of more than £23.2 million.