Factory jam causes profit warning at
Spongegroup
Spongegroup
plc yesterday issued a profit warning to the financial markets in London
amid increasing concerns about the impact of last month’s factory jam. An
emotional Cathy Clyde MBE, chief executive of Spongegroup, told the Floor
that “…at this very sticky time for Spongegroup
and in particular it’s SBUs (strategic business units) within the cake and
soft biscuits industries [we are still feeling the effect of] last month’s
factory jam.”
The overuse of jam-based ingredients caused much of the machinery used by
Spongegroup to make cakes, biscuits and, ironically, fruit preserves to clam
up and ultimately fail. This reduced total shipments of much loved products
such as Dr Bizarre’s Oat Biscuit Nightmare
Surprise and Janie Dodge Hers, with supermarket stores having
to bring in armed security guards to quell the atmosphere of public hysteria
displayed during the crisis.
Workers in the affected facility reported horrendous conditions immediately
after the incident, with one man quoted as becoming “emblazoned
with jam”. Shipments of popular Spongegroup products have been
exported from factories in the Cook Islands, although conflicting reports
have emerged which allege the products were “well past their sell by date”
by the time they arrive in the UK.
Spongegroup spokeswoman Kelly McNab earlier this week issued a statement to
ease consumer tensions, insisting that supplies would return to
pre-jam levels within “a week”. The
incident is likely, however, to hit annual company revenues hard, with extra
expenditure on so called “jam cleaners” also eating in to profits. The
announcement is the latest in a long line of negative headlines the company
has had to endure this year, following February’s revelation that many of
the products produced contained, according to the packaging, “stones”. The
company insisted at the time that stones would not harm any part of any
typical nutritional diet and that, at just 0.8% of the total ingredients,
there was “…less stones than bloody glycerol mono-stearate…and that’s in
just about everything nowadays!”
Shares in Spongegroup nosedived yesterday to a year low of 55p a share, but
by lunchtime had rallied to a year high
of £5,600.12.