La Doria: A Tough Environment
Edison | Nov 22, 2016 12:24AM ET
As outlined at the time of the H1 results, La Doria's (MI:LDO) operating environment remains tough, with significant deflation on the sales side and raw material inflation on the cost side. The effects of a difficult 2016 tomato campaign are still feeding through, and the devaluation of sterling is unhelpful as it may cause a loss of competitiveness in the vegetable line vis-à-vis British domestic producers. Management expects a recovery from mid-2017, when the new tomato campaign will start to come through.
Nine-month results
In Q3, La Doria witnessed a continuation of the trends seen in H1, specifically a deflationary trading environment and weakening of sterling. In addition, cost inflation started to feature. As outlined in the recent three-year business plan, management expects 2016 to be weaker than 2015, followed by a further weakening in 2017 before the recovery starts to come through. This should commence in H217 following a better 2017 tomato campaign over the summer (a drop in southern Italian tomato production in 2016 bodes well for 2017 pricing), and should come through fully in the 2018 numbers.
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