Raisio cuts earnings guidance amid UK confectionery challenges

By Oliver Nieburg contact

- Last updated on GMT

Poppets delistings and UK factory challenges lead to revised 2017 guidance. Photo: Raisio
Poppets delistings and UK factory challenges lead to revised 2017 guidance. Photo: Raisio

Related tags: Confectionery, United kingdom

Raisio has reduced its 2017 guidance after production and commercial challenges in its UK confectionery business.

It previously forecast EBIT would “fall slightly short”​ of €50.7m ($59m) for full-year 2017,  but now expects 2017 EBIT of around €45m ($52.4m).

‘Prolonged production and commercial challenges’

“The outlook is revised due to prolonged production and commercial challenges of the UK confectionery business, lower than estimated profitability and the weakening of the pound against the euro,” ​said Raisio in a release.

Poppets and some Raisio's private label confections were recently delisted by certain UK retailers.

The company has also reported production difficulties at its UK confectionery plant in Leicester that produces toffees, boiled sweets, mints and chocolate candies.

“Work to solve the production and commercial challenges is underway,”​ said Raisio in its release today.

The company will report its half-year results (January to June) on August 9 this year.

Eyeing new markets in Europe

In its release, the company said it will continue to invest in its brands and hopes to expand to new markets in Europe.

Rasio confectionery brands include Poppets Fox's Glacier and Juicee Gummee, but three quarters of its confectionery sales are for private label products.

Its confectionery unit – which accounts for almost a third of group sales – reported a -9.3% drop in Q1 revenues to €23.4m ($25.5m), it announced in May.

Raisio’s group CEO Matti Rihko resigned​ in January this year.  Jarmo Puputti is acting as interim CEO while the company finds a full-time replacement.

Related topics: Manufacturers, Chocolate, Candy

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