Shares in AIM-listed butcher and meat retailer Crawshaw (LON:CRAW) saw shares fall by nearly a fifth in early morning trade on Wednesday, after seeing a surprise drop in sales.
Like for like sales fell by 7.4 percent in the third quarter of the year, leading to an underlying operating loss of £1.1 million. The sales figure did represent an improvement on the quarter before, however, where they fell by 13 percent.
The group reported a 19 percent increase in group turnover to £44.2 million, up from £37.1 million in 2016, driven by store expansion programme. 11 new sites were added, taking the total to 49 trading stores at year end.
Noel Collett, CEO, said it had been a “year of strategic progress” for the group.
“As a management team, we acted decisively and effectively at the end of the first half of the year to address the price and range initiatives that weren’t resonating with customers. By listening to customers and focusing on the demands of each store’s individual local community, we have seen a sharp recovery in both sales and customer numbers throughout the second half of the year.”
Looking ahead, he continued: “the momentum built through the last six months has continued into the new financial year, and trading is recovering in line with our expectations. With the business stabilised and having returned to cash generation, we are returning our focus to the store roll out programme.”
The figures come alongside an announcement that Crawshaw Group has agreed a deal with prominent food supplier Sisters Food Group to become a significant shareholder in the business. It has also entered into a “transformational” supply chain partnership with the meat and food producer.
Subject to Crawshaw shareholder and Takeover Panel approvals, 2 Sisters CEO Ranjit Boparan is expected to invest approximately £5.1 million for a 29.9 per cent stake in Crawshaw, with a warrant to acquire a further 20.1 per cent of the group.
Investor sentiment remains negative towards Crawshaw, however, with shares currently trading down 18.68 percent at 24.60 (0917GMT).