Patties Foods is aggressively expanding its gourmet pie business after taking a huge profit hit from the frozen berries contamination scare.
Costs linked to the mass recall of its Nanna's and Creative Gourmet frozen berries products from February to April was the main reason $14.6 million was wiped off Patties' balance sheet.
More than 30 people contracted hepatitis A, however microbiological and viral tests in April found no hepatitis A or E coli in samples of recalled frozen berry products.
Since the health scare, Patties tests every batch of its frozen berry products, most of which are processed in China, and every batch has been cleared off for hepatitis A or E coli, the company says.
Patties made a net profit of $2.1 million in the 12 months to June 30, down from $16.7 million the previous year.
Saving the company from slipping into the red was its savoury food business, which accounts for 90 per cent of the business and includes Four'N Twenty pies.
Managing director and chief executive Steven Chaur says Patties has been aggressively expanding into the $1.4 billion savoury food sector by going beyond supermarkets and petrol and convenience shops to include cafes.
"When the frozen berries recall hit, the entire organisation was mobilised around the recall and consumer safety," he told AAP.
"We then went into rebuilding mode and focused heavily on improving our savoury business to offset any margin losses from frozen fruit, and that momentum is continuing into the first quarter of this year."
The company expects a long and slow recovery for its frozen fruit products.
"Consumers, in effect, walked away from the frozen fruit business and started buying fresh fruit," Mr Chaur said.
"The good news is consumers are coming back to the category on the basis of convenience and value and we are seeing every month incremental gains."
Total revenue rose 3.7 per cent thanks to the group's savoury business which included an 11 per cent jump in sales for its gourmet Herbert Adam's brand, a 5.1 per cent rise for Four'N Twenty and a 7.6 per cent lift for Patties.
Nanna's sweet pastry products also performed strongly with sales lifting 19 per cent.
Shares in Patties Foods were up five cents, or 4.42 per cent, at $1.18, while the wider market was down four per cent.
PATTIES FOODS PROFIT PLUNGES ON FROZEN BERRIES RECALL
* Full year net profit of $2.1m, down 87 pct
* Trading revenue of $256.9m, up 3.7 pct
* Fully-franked final dividend of 5 cents, up from 3.9 cents
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