Patties Foods (ASX: PFL) the manufacturer and owner of brands including Four’n Twenty, Patties, Herbert Adams, Nanna’s and Creative Gourmet — has posted a 3.8% increase in sales to $244.8 million, but a 12.8% drop in underlying net profit after tax to $17 million.

The company posted market share gains across much of its product range, including the well-recognised Four’n Twenty brand. However, brands within the frozen fruit category faced particularly tight pressure on margins. The poor performing frozen fruit category ultimately required an impairment on the carrying value which affected statutory profits to the tune of $11.8 million.

There was good news in Patties Foods’ results, including increasing sales in the Out of Home segment and strong cost control. The fall in underlying profit was in contrast to fellow food manufacturer and brand owner Goodman Fielder (ASX: GFF), which reported last week that it had increased net profits from continuing operations by 5% for the full year.

Foolish takeaway

With underlying earnings per share of 12.2 cents and a full year dividend of 7 cents per share (down 14.6% year on year) Patties Foods is trading on a price-to-earnings multiple of 11.9 and a dividend yield of 4.8%. On these numbers the company would appear to be about fair value but could be worth investors monitoring for any weakness in the share price.

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Motley Fool contributor Tim McArthur owns a share in Goodman Fielder.