Growing media supplier William Sinclair said today that last year's bitterly-cold spring was partly to blame for a further slump into loss in the year to September 30 2013.
The company's preliminary results for the 12 months show revenue down to £46.5m from 2012's £48.2m and an operating loss before exceptional items of £0.2m against a £0.5m profit the year before. Pre-tax loss was £1.2m against 2012's £0.4m loss.
"The past financial year has yet again been extremely challenging for trading, with the all-important spring selling season being the coldest for 50 years," said chairman Hugh Etheridge. "This led to lower sales by our customers to the public and consequently a loss of profit to us. Unlike the previous year though, we were able to harvest a substantial amount of peat in the summer so that we are well positioned with raw materials for next season."
The company also incurred extra costs with the setting up of its new Ellesmere Port facility ahead of the closure of the Boothby peat processing plant, which should complete this year.
William Sinclair is still in protracted negotiations with Natural England over the amount of compensation it will get for relinquishing Bolton Fell Moss in Cumbria, a rare wildlife habitat, and the closure of the factory next to it.
"This means we are reliant on our own funding to develop the Ellesmere Port site," said Mr Etheridge. "It is regrettable that our bank, after years of demonstrating strong support, was, at short notice soon after the financial year end, unwilling to extend the additional facilities we were expecting, causing us some short-term cash flow strains.
"However, in December 2013 we successfully raised £8.24m
before costs in convertible loans from a group of existing investors. We have also decided to re-finance our working capital facilities and have recently secured improved facilities with RBS group."
He said the development of Ellesmere Port would help the company move from being a peat-based agricultural business into a modern manufacturing company of non-peat-based growing media.
"We have consolidated all our production of SuperFyba at the site and are confident that we will develop our new business in peat-reduced and peat-free products to compensate for the loss of the peat we can no longer harvest at Bolton Fell."
New chief executive Peter Rush added: "William Sinclair is on track to deliver its objectives of greater operational efficiency, scale and growth."