Turnaround is working says Norfolk turkey boss
PUBLISHED: 18:16 06 November 2013 | UPDATED: 18:16 06 November 2013
Bernard Matthews executive chairman David Joll yesterday underscored the task ahead to return the group back to profit after it reported pre-tax losses totalling £20.4m.
Last year’s severe winter weather and wet spring, combined with rising feed prices, all hit the bottom line at the turkey firm, while the restructuring of its Hungarian operation also cost the business a £4.3m exceptional charge.
Figures released yesterday showed that group sales for the year end to June 30 were actually up to £346.4m (from £341.4m in 2012).
But the firm also recorded an £11.7m operating loss compared to a £5.3m operating profit last year.
Mr Joll said that the firm also needed to look at the way it operates to help it return to a more successful path.
“These are clearly disappointing results,” he said. “The company has incurred these losses for a combination of reasons which include significant increases in global grain prices and poor wheat quality impacting bird performance together with one off costs associated with the restructuring of our Hungarian operation.
The results pre-dated a decision to bring in turnaround specialists Rutland Partners in a move which will inject more than £20m into the group, and he said that the business, which is also embarking on a new marketing campaign aimed at mums, was beginning to see the impact of some of those changes.
“The positive news is that since our year end we have addressed many of these issues and have welcomed Rutland Partners to the business,” he added.
“With improved trading conditions, and the new injection of capital into the company, we have a greater level of stability and financial headroom to achieve our objective of returning to profitable growth in 2013/14.
“We had the perfect storm of high feed costs globally. The trading figures early this year were very bad - action was required and action has been taken. I don’t think operationally we were as efficiently structured as we should have been, and the feed and weather has just compounded those problems.”
“The reason for bringing Rutland in was to stabilise the business financially and that certainly has been achieved. The reason they made that investment was that we had come up with a three year turnaround plan to show where we believed we could turn the business around back into profit in that period.
“It’s very early days, but we are achieving that model. We are investing in plant and equipment again and we are investing in our farms and factories.”