Contrasting fortunes for region’s farm, food and drink industries
- Credit: Eastern Daily Press © 2010
With this year's harvest now filling the barns and silos of East Anglia's farms, this month's Top 100 analysis focuses on the food, drink and agriculture sector. As DUNCAN BRODIE reports, there are plenty of success stories for the region's leading players in the sector, but it is not all plain sailing...
It has been something of a mixed year so far within East Anglia's key food, drink and agriculture sector.
According to the New Anglia Local Enterprise Partnership, which has identified the sector as one of its priority areas, food, drink and agriculture businesses directly employ more than 20,000 people in Suffolk and Norfolk, with a further 94,000 jobs in the region being related in some way to agriculture.
By number, the sector is by some way the most represented within the Top 100 listing of the 100 largest companies in Suffolk and Norfolk, with three in the top 10 and a total of 21 in all.
Many of these companies have been performing strongly in recent months and years, not least Bury St Edmunds-based pubs and brewing group Greene King.
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In June, the company posted another year of record revenues, with sales within its key retail division topping £1billion for the first time.
Group-wide revenues for the 52 weeks to May 3 totalled £1.315bn, a 1.1% increase on the reported figure for the previous year and a 3.0% rise when adjusted for the 2013-14 results having covered 53 weeks.
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Profits also continued to climb on an underlying basis, although the overall figures were affected by the disposal of 275 non-core pubs and lower like-for-like sales growth.
But the most significant development of 2015 for Greene King came after its financial year-end, with the completion earlier in June of its £774m acquisition of the Spirit Pub Company. This has added around 1,200 pubs to the company's estate.
Earlier this month, Southwold-based Adnams reported a 12% increase in first half profits to £962,000, with one-off gains on the sale of three pubs offsetting a dip in revenues.
Adnams hailed the profit figure for the six months to June 30 as 'a strong result' in the light of the impact of a long, cold spring.
Turnover was down 3% on last year's first half at £29.1million, which Adnams said was also partly a result of two of its hotels having been closed for refurbishment for part of the period.
Adnams has also contined to gather awards, with its newly-rebranded East Coast Single Malt Vodka (formerly Copper House Barley Vodka) being named Best Varietal vodka at the 2015 World Vodka Awards and receiving a gold medal in the 2015 International Spirits Challenge.
But success has not been limited to the drinks sector. In June, Cranswick plc, which includes pork producer Cranswick Country Foods, based at Thetford, reported sales above the £1bn mark for the first time in its history.
The company posted a 0.8% rise in revenue to £1.003bn, compared to £994.9m the previous year, while adjusted pre-tax profits grew by 10.6% to £57.8m over the same period.
There were also improved results from poultry company Bernard Matthews which posted a significantly reduce annual loss for the year to June 29, 2014.
The company said easing cost pressures and a tighter grip on its turkey supply had helped trim the loss to £9.9m, from £20.3m the year before, despite a fall in turnover from £346.3m to £306.8m.
And Anglia Maltings, based at Great Ryburgh near Fakenham, which includes the Crisp Malting Group and Essex-based EDME, has filed accounts showing a 33.5% increase in pre-tax profits for the year to the end of December 2014 to £13m.
However, many smaller food manufacturers and growers are having a tougher time, and farmers at the 'grass roots' of food production in particular know all about vagaries of commodity prices.
The problems faced by dairy farmers have been well publicised.
Of wider concern within this region, some industry analysts argue that arable farming is facing an economic challenge just as severe as in other sectors of agriculture.
Apart from a brief rise toward the turn of 2014/15, wheat and other grain prices have remained below the cost of production for a year, with many input costs remaining high relative to the fall in wheat prices.
There is also evidence that smaller food manufacturers, along with farmers are increasingly being squeezed by the wider price war between the big four supermarkets.
According to a study by insolvency adviser Begbies Traynor, the number of UK food and beverage manufacturers in 'significant' distress rose to 1,622 in the second quarter of 2015, a 54% rise on last year and the highest increase of all sectors monitored by the firm's Red Flag research.