Patties Foods has taken another big hit from the fallout of the hepatitis A berry scandal.
The savoury pies and frozen desserts supplier's half year profit fell 11.8 per cent to $7.3 million in the six months to December 31 largely due to a significant fall in revenue from its frozen fruit business.
Revenue from frozen fruit, including the Creative Gourmet and Nanna's brands, dived 62 per cent in the half, leading to a 8.6 per cent fall in total group revenue.
Excluding the frozen fruit impact, revenue was up 2.8 per cent with strong growth from FOURN'TWENTY pies and Nanna's Sweet Pastry products.
Patties chief executive Steven Chaur says that during the half, the company had heavily discounted its frozen fruit in a bid to attract customers back after the berry recall in February 2015.
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"Towards the first half of 2016 we were managing out a lot of inventory we had to wear because of the collapse of the category's sales," he said.
"A lot of our focus was on reducing inventory and also investing in marketing and promotional activities to try and bring consumers back to the category."
But, he said, sales continued to decline when once before it enjoyed about 40 per cent year on year growth.
Patties announced in December that it will rid itself of its frozen fruit business.
Mr Chaur said the sale of Creative Gourmet to Entyce Food Ingredients has just been completed and all Nanna's fruit stock was on track to be sold by May.
The company will focus on its pies and pastry business which continue to experience strong sales growth with FOURN'TWENTY sales up 3.1 per cent and Nanna's Sweet Pastry up 15.2 per cent.
"The frozen fruit exit has been a difficult one in the past 12 months," Mr Chaur said.
"But the results show the company is robust and the core underlying business performed well in the last half."
He said he expects strong growth into the future.
Shares in Patties was up two cents, or 1.77 per cent, at $1.15 at 1340 AEDT.
FROZEN BERRIES WEIGH ON PATTIES PROFIT
* Profit down 11.8pct to $7.3m
* Revenue down 8.6pct to $126.2m
* Interim dividend of 2.7 cents vs no distribution previous comparable period
