Premium Brands Income Fund (TSX:PBI.UN), which manufacturers and distributes specialty food products in Western Canada, reported record annual revenue for its year ending December 31, 2008.
Annual revenue for the Vancouver company jumped 37.6% to $449.4 million in 2008 from $326.4 million the previous year due to a combination of produce price increases of between 2% and 3% and a number of new product and distribution initiatives to expand its geographic market.
While the fund reported record revenue, net profit was hit by increased input prices and financing costs for its acquisitions in 2007. Annual net profit fell to $21 million from $25.5 million in 2007.
According to the company, unusually rapid increases in the cost of food inputs part way through the third quarter could not immediately be passed on to consumers. That led to lower than average gross margins for some of Premium Brands' products for part of the third and fourth quarters.
The fund also reported an increase in financing costs to $7.3 million in 2008 from $4.9 million in 2007 due to additional debt associated with its 2007 acquisition of Centennial Foodservice and Stuyver's Bakestudio.
George Paleologou, president and CEO of Premium Brands, said he was confident the company would continue to generate strong results despite the volatility and uncertainty in the economy.
Centennial Foodservice, Bread Garden Express, Creekside Custom Foods and Grimm's Fine Foods are among the dozen or so businesses Premium Brands operates.
Premium Brands' unit price range during the past week: between $8 and $8.40; 52-week high: $14.64; 52-week low: $6.55.