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TWST: Can we begin with an overview and historical sketch of Richmond Foods (LSE:RFD.L)?

Mr. Lambert: I established Richmond as an ice cream manufacturer in 1985 with a couple of colleagues. We realised in the early 1990’s that the UK industry needed consolidating. As the youngest and probably the most energetic in the market, we decided that we would be the consolidators. Our first acquisition was Windsor Creameries in 1995. In 1998, we reversed Richmond into Treats, a branded business which had floated two years previously. Although a sound business, it had been badly managed. From Richmond’s point of view, its stockmarket listing gave us the access to capital we needed. We then bought the own-label ice-cream business of Associated British Foods giving us four factories and about 60% of the own label market. But we also wanted to take advantage of the growth opportunities in the branded market as well as own label. So I approached Nestle to see whether we could market and manage their UK ice-cream business. They said no but agreed to sell it to us instead and we acquired the business in October 2001. Through this process we acquired a total of eight factories. In order to achieve the necessary low-cost base we have consolidated production into four sites where we will continue to invest heavily over the next 2-3 years, particularly the two Northern factories. Today, as a result of this process, Richmond is the UK’s largest, most efficient ice cream manufacturer.

TWST: What would you like to achieve in this space to ensure the next couple of years are a success?

Mr. Lambert: Richmond Foods has got nearly half the volume in the UK “take home” or “eat later” market and then in October we added brands. The brands tend to be high value products generally. So we will be pushing as much of our volume into those higher value markets as we possibly can. I suspect that we have got 46% of the volume, but we have only got 25-26% of the value. I would expect over the next 2 or 3 years, with our own-label and branded offerings, to be at least as big as Unilever in this market. They have currently got 33-34% and so we intend to grow our share of this growing market.

TWST: In summary, when you have a chance to sit down with investors, what are the two or three key reasons you give for them to consider an investment in Richmond Foods?

Mr. Lambert: The first point is that with Nestle, there is a lot of potential to unlock the Nestle confectionary brands into ice cream. Secondly, I would emphasize our cost of manufacture and the scale of our manufacture. We are the UK’s largest ice cream manufacturer by a long way and so we can always leverage that position in the market as the lowest cost to operate. The third point is that we’ve been offered the opportunity, with Unilever losing its monopoly, to access a lot more industry cabinets particularly with our strong children’s brands such as Fab, Fruit Pastel, Ribena push up and Smarties. This should help us to grow our impulse business.