William Sinclair reports loss, but says future looks brighter

Peter Rush
Peter Rush

William Sinclair preliminary results for the 12 months ended 30 September 2013 show a revenue of £46.5 million (2012: £48.2 million) "despite extreme cold spring conditions".

The compost company had a "significant increase in sales during second half" but made an operating loss before exceptional items of £0.2 million (2012: profit £0.5 million).

Loss before tax was £1.2 million (2012: £0.4 million).

An £8.24 million fund raise was completed in December 2013 and increased banking facilities with RBS were secured in January 2014.
 
Chief executive Peter Rush said: "The modernisation of William Sinclair's operations is gathering pace with the acceleration of [new site] Ellesmere Port's development and on-going investment into our market leading products. With the injection of new capital from the recent fund raising, this rate of progress can be maintained.
 
"Combined with healthy supplies of raw materials and increasing production levels of SuperFyba, William Sinclair is on-track to deliver its objectives of greater operational efficiency, scale and growth."
 
New chairman Hugh Etheridge said the cold spring hit sales but "unlike the previous year though, we were able to harvest a substantial amount of peat in the summer so that we are well positioned with raw materials for next season.

He added: "However the additional costs of running the new Ellesmere Port facility ahead of the closure of Boothby led to increased costs. As a consequence the group made a loss in the year."

At Ellesmere Port production of SuperFyba and Silvaperl has begun.

Etheridge added: "We continue to be in protracted negotiations with Natural England over the amount of compensation due to us for the purchase of the Bolton Fell moss and the closure of the factory next to it.  This means we are reliant on our own funding to develop the Ellesmere Port site. 

"It is regrettable that our bank, after years of demonstrating strong support, was, at short notice soon after the financial year end, unwilling to extend the additional facilities we were expecting, causing us some short term cash flow strains.  However, in December 2013 we successfully raised £8.24 million before costs in convertible loans from a group of existing investors.  We have also decided to re-finance our working capital facilities and have recently secured improved facilities with RBS group.  We are now well resourced to meet the financial challenges we are facing."

Rush said: "Turnover fell by approximately £1.8 million, or 3.7 per cent, to £46.5 million predominantly from a reduction in demand by the professional growing sector in response to price increases."

He added: "Within the next 12 months the business will have transitioned its manufacturing operation from six sites down to two, with operations at Ellesmere Port and Lincoln.  In addition to the obvious efficiency gains and the centralisation of business operations, it will also result in the modernisation of customer servicing.

"During 2014 the business will become more consumer focussed.  This will be achieved by investing in and re-positioning the company's brands as well as a programme of new product development, based on consumer driven innovation.

"Finally, with further consolidation anticipated amongst customers, the Company will streamline its channels to market and sales operations to provide the optimum platform to support future sales growth."

Sinclair reported additional business with The Garden Centre Group, Tesco and The Range.

Ellesmere Port is being prepared for the installation of a screening, mixing and packing facility.
The development of the site is now expected to be completed in 2015.

Sinclair's Freeland  business successfully tendered for contracts linked to the redevelopment of the London Olympic venue into the Queen Elizabeth Olympic Park.

As a consequence of the closure of the Bolton Fell peat bog William Sinclair "will need to ensure its remaining peat reserves in Scotland are well maintained to maximise future harvests". 

 


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