Baker burnt by tough times

By Dita De Boni

Christchurch-based baker Ernest Adams said it had not foreseen the tough trading conditions and higher interest costs that lay ahead when forecasting in 1998.

It posted an after-tax net loss of $1,208,000 for the year to March 31, compared with last year's $820,000 net profit. Sales increased 10.4 per cent to to $65.2 million from $59 million in 1998, and interest costs jumped from $813,000 to $979,000.

Earnings before interest and tax for the year were $775,000, compared with 1998's $2,675,000.

Chairman and acting CEO Michael O'Neill said the restructuring the company began in 1995 had just started to show benefits by the beginning of the 1999 year, later than expected. He said the reason for such a delay was rationalising "too much, too soon".

The company disclosed non-recurring costs of $1,468,000 for the year, including $927,000 for 22 redundancy settlements. Mr O'Neill said the company had not identified further redundancies.

Export sales to Australia and Japan rose 30 per cent in 1998 although domestic sales grew only six per cent. The company said it would try to increase domestic figures with a new product range in the coming year.

Ernest Adams shares dropped 3 cents to $1.65 yesterday afternoon.