Growth in Asia helps Cedenco

By DITA DE BONI

As the process of selling Gisborne-based Cedenco Foods takes off, the company has advised the market it will meet year end forecasts for the year to September 30.

The latest forecast for the food and vegetable manufacturer is a pre-tax profit of $3.11 million, pared back to $2.41 after tax. The company has predicted a 50 per cent leap in pre-tax profit in the 2001 full year to $4.7 million.

Commenting on this year's 40 per cent earnings jump, chairman Basil Logan says the company has profited from strong growth of its New Zealand-based processing and export business into Asia. It had increased market share and volumes into Japan and Korea, and had maintained price points and margins in those markets by targeting the "high-quality" market segment.

Further opportunities in both those markets, as well as opportunities further afield, would be reflected in the price the company sold at, he said.

Tomato operations in Australia, which Mr Logan described as "not ... too snappy" at last year's full-year profit announcement, had been flat in the year, in line with earlier predictions.

Cedenco advised last week that due to Brierley Investment's intention to sell its 48.5 per cent stake in the company, it would invite parties to register interest in 100 per cent of the company.

Mr Logan would not expand on the initial stages of that process yesterday, except to say that expressions had been received, some from domestic concerns.

He said the expression of interest stage would last for the next couple of weeks, after which the company would ask for indicative bids from serious players. An independent evaluation will follow. He did not foresee his role as chairman continuing under new ownership.

The move to offer 100 per cent of Cedenco to the market comes approximately two months after Australia's largest fruit and vegetable manufacturer, Golden Circle, stepped away from a deal to buy 54 per cent of the company. No reason was ever disclosed for the deal's collapse.

Golden Circle was offering between $11.8 million and $14.1 million for the stake, valuing shares at between 138c and 165c each. Shares in Cedenco closed yesterday up 2c to 116c.