Zetar cautious as consumers tighten purse strings

Aim listed snack foods company Zetar warned orders for Easter are weaker than last year as consumers continue to cut back on spending.

While the group gave a cautious short-term outlook, it reported decent half yearly figures with adjusted pre-tax profit of £2.8m, up 13% and revenue of £61.8m compared to £60.3m the year before. Net borrowings at 31 October 2011 reduced to £24.4m from £26.0m in 2010.

The snack business suffered a decline in revenue after the planned exit from it non-profitable commodity business but overall chief executive Ian Blackburn said he was pleased with the performance in challenging conditions.

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"The group had a good first half and is confident that its major strategic initiatives for profitable growth remain on track. Despite the pronounced fall in consumer confidence during the late Autumn we had a reasonable Christmas but our customers' ongoing caution about consumer demand has so far resulted in Easter orders being confirmed at lower levels than last year," said Blackburn.

"Whilst the outlook for Easter remains less certain...we believe that the group's robust business model, combined with its strengthened financial position and progress in extending our portfolio of brands, means that we are well placed to capitalise on future growth opportunities."

Zetar announced a maiden dividend of 2.25p per ordinary share paid 4 November 2011 in relation to year-ended 30 April 2011.