Coldwater sets out recovery strategy –

Coldwater sets out recovery strategy Published:  21 November, 2006

Anita Barker

COLDWATER Seafoods UK, the troubled manufacturer of fish products for leading retailers like Marks & Spencer, has set out a firm strategy for recovery.

New managing director Anita Barker unveiled her mission statement in the parent Icelandic Group’s third quarter presentation to shareholders in Icelandic.

The former Geest finance executive, who took over the top post earlier this year, said: “It is our mission to be the UK’s leading producer of fish meals, both chilled and frozen.

“We want to use our expertise in development and innovation to grow the business with UK retailers and to use the range offering from the Icelandic Group to position the complete opportunity for the group from fish fingers to lobsters.

She added: “We shall also use our vast fishing experience direct with Icelandic to ensure quality development and availability of species.”

Coldwater UK have three factories in the UK – two at Grimsby and one at Redditch in the Midlands. Turnover at the Grimsby West site, which is 70 per cent dedicated to producing fish for Marks & Spencer, has an annual turnover of £40million. The Grimsby East factory produces for all retailers and produces frozen coats, breaded and battered products and has an annual turnover of £50million.

The Redditch site, a former Albert Fisher factory, is totally dedicated to producing Marks & Spencer chilled meals like M&S Haddock in Mornay Sauce or Salmon in watercress Sauce, and turned over around £40million last year.

Coldwater UK showed a loss of £2.6million last year, largely due to high prices, a factory which has affected all fish producers in the UK this year. The price of fish products in the shops has also risen above the national inflation rate. And the exceptionally hot summer also badly hit fish sales during June and July.

Coldwater say they have now set a recovery plan in train which includes strong overhead control on costs and since September there are clear signs that this recovery is starting to pay dividends. Most of the Grimsby frozen fish production is being transferred to the newly acquired frozen fish plant at Wimille, near Boulogne which will free up South Humberside for further expansion in the rapidly growing chilled fish and chilled fish meals market.

Icelandic’s other main UK operation is Seachill at Grimsby, the fresh fish business started by a group of former Bluecrest executives over a decade ago and bought by Icelandic three years ago. The plant which now employs over 500 people is expanding rapidly and sales to Tesco, its main customer, have increased by a staggering 30 per cent so far this year, despite the rise in fish prices.

Other Icelandic global activities (all nine months January to September unless otherwise stated) are:-

Icelandic Asia (excluding Japan) – Gross totalled 125million euros (£85million). In addition Japanese sales for same period totalled 94million euros (£64million). Asian sales fellow below management expectations.

Icelandic USA – Sales up three per cent to 213million euros (£145million). Moves under way to improve profit margins and a new distribution centre next to the Newport Mews processing should enable Icelandic to store and ship orders for a single combined location.

Icelandic Denmark – Jeka Fish became part of the group in April and sales at 11 million euros (£7.5million) are on track

Icelandic France – sales up four per cent to 54million euros (£36million) and while first half results were poor there was a major improvement in the third quarter. The Delpierre buy-out at Wimille is expected to turn operations around both in France and in UK (Grimsby).

Icelandic Spain – Sales up 10 per cent to 68million euros (£46million) and performance is line with budget expectations.

Icelandic Germany (Pickenpack) – Overall sales up 11 per cent to 146million euros (£99million). Third quarter performance hit by hot summer and therefore results below target.

Icelandic UK – Coldwater UK and Seachill sales 339million euros (£230million). Weather and high prices problems already mentioned above.