Raw material costs squeeze Zetar’s margins
Zetar, the AIM listed confectionery and snack foods group, said today (16 November) that it was benefiting from good Christmas orders but increasing raw material costs at its natural snacks division were eroding margins.
In a trading update for the six months ended 31 October, Zetar announced that trading was in line with expectations and ahead of last year with sales up 5.4% to £60.2 million (2009: £57.1 million).
The Confectionery Division had traded strongly, due principally to the increasing importance of everyday sales but also good Christmas orders. However, the Natural Snacks Division had to contend with ever increasing raw material costs which, despite customer price increases, impacted its margins, although recovery is expected in the second half.
