An 80 per cent drop in full-year profit for potato chip-maker Mr Chips has been put down to overstocked inventories and a high dollar denting earnings.
Mr Chips posted a net profit after tax of $297,000 for the 12 months to March 31, compared with $1.45 million the previous year.
The profit dip - flagged to the market last September - was due to being overstocked in a competitive market, the strong NZ dollar cross rate with the Australian dollar, and a dependence on external cold storage.
"As a result, gross margins were significantly reduced," the company said.
Total operating revenue rose 23 per cent to $43 million, with domestic operations performing steadily.
Prospects looked better for this year, with the cross rate moving sharply in Mr Chips' favour recently.
The company also commissioned its own cold store on its East Tamaki, Auckland, site, eliminating the need for external storage.
Mr Chips improved market share and, at balance date, its finished goods inventory was at "optimum levels".
