Profits turn flaky for Weetabix but sales float higher on Bitesize launch

CEREAL maker Weetabix saw its post-tax profits slide last year as it took a hit from restructuring costs and redundancy payments.<br /><br />The company, which also owns the Alpen muesli and Ready Brek porridge brands, reported total profits of &pound;75.7m for 2008, down &pound;2.3m year-on-year.<br /><br />The cost of overhauling its operations in Kettering and Corby dragged on the results. Weetabix spent a total of &pound;13.5m on redundancy packages for laid-off staff, pension payments and site refurbishments.<br /><br />Although the 12 months were a tough time for consumer brands, it seems Weetabix benefited from positioning itself at the affordable end of the breakfast cereals market. Sales increased 6.5 per cent to &pound;314.3m, boosted by the launch of Weetabix Bitesize.<br /><br />In a statement, the company said: &ldquo;2008 was a year of major upheaval right across the food industry.&rdquo;<br /><br />Weetabix is owned by London-based private equity outfit Lion Capital, which also has stakes in lingerie chain La Senza and restaurant group Wagamama.<br /><br /><strong>MORE COST CUTS AHEAD, BUT WEETOS ARE THE BRIGHT SPOT IN PORTFOLIO</strong><br />Breakfast is indeed the most important meal of the day. Being a staple rather than discretionary consumer item helped insulate Weetabix from the worst of the recession last year. <br /><br />Being seen as a healthy option was also a plus, the company said.<br /><br />Figures from research firm Nielsen show the breakfast cereals market as a whole grew 0.2 per cent in 2008. This compares with sharp contractions in more luxurious parts of the food market. Weetos, the chocolate hoops, were the bright spot in Weetabix&rsquo;s portfolio, growing market share by 20 basis points on the back of a hefty TV advertising campaign, while Alpen and Ready Brek managed to hold onto their slices of the market. Weetabix Bitesize muscled into the market and helped the overall Weetabix brand expand its market share by 0.3 per cent.<br /><br />Weetabix seems determined to carry on with its cost-cutting programme. In its accounts, the company said: &ldquo;Our plans for 2009 include a continuation of the progress made so far, and with the continued support of our workforce, we are confident that further efficiencies can be achieved.&rdquo;