By shaun Lowthorpe Business editor
Wednesday, November 14, 2012
Rising turkey sales in the UK have helped Bernard Matthews Group produce a £2m profit in the 12 months to July – but the firm is warning that consumers could be forced to pay more for food as increased global commodity prices have pushed up feed prices in the last six months
Unveiling its results, the company, which is based in Great Witchingham, near Norwich, said group sales totalled £341.4m for the year – compared to £470.8m in the previous 18 months – while UK turkey consumption was up more than 4pc.
Bernard Matthews Oldenburg, its German subsidiary, had a difficult year due to a number of external factors, including the poor summer weather which hit barbecue sales, and rising raw material costs, while SáGa Foods, the Hungarian subsidiary, experienced increased input costs allied to relatively weak commodity meat pricing, and the continuing difficulties in the Hungarian economy.
However, despite reversing a £6.6m loss from the previous year, the EDP Top 100 company remains cautious about the outlook ahead.
Bernard Matthews’ Group chief executive Noel Bartram said: “Whilst performance in the last financial year has been encouraging, there is still significant progress to be made.
“We have continued to incur unprecedented feed cost increases and do not envisage such increases abating over the coming year. With consumer spending and the wider economy remaining weak, we are cautious on our outlook for the next 12 months.
“Nonetheless, we remain focused on our strategic objective of doubling turkey consumption in the UK by 2020 and are encouraged by the 4.4pc growth over the last year. I believe this to be a reflection of our continued efforts to promote turkey as a healthy and affordable meat.”
Rob Mears, managing director at the firm, which employs more than 2,200 staff in East Anglia, said the firm had already invested £3m upgrading its facilities at Great Witchingham and a new refinancing deal agreed with its bankers would allow further investments to take place to help drive efficiency and improve business performance.
“The UK business is performing well, and our sales are improving for the third year running,” he said.
“But the level of profit we are generating for a business of our size is still pretty slim and for a business of our size we need to achieve higher levels. But we have managed to refinance the business and we have got more liquidity, which means we can make some significant investments to further enhance performance.
“The main concern is the extremely difficult trading conditions, with costs continuing to be at record levels. Certainly they are having an impact on the business and we expect this to continue for the remainder of 2012/2013.
“We are doing our best to minimise that, but inevitably consumers will have to get used to paying more for foodstuffs. This is not something that is unique to us.”