1 March 2002

Dalgety denies downward turn

By Andrew Shirley

DALGETY Arable is vehemently denying rumours circulating the grain industry that its business is floundering.

Much of the speculation is based on figures that appear to show the company lost more than £19m during the year ending Mar 31, 2001. Added to this, one of the UKs largest credit rating companies – London-based ICC – has given the firm a very low score in terms of credit worthiness.

ICC marketing director Adrian Howells said the zero rating was primarily because Dalgety Arables accounts showed the company had a negative net worth. Although he emphasised this could be explained, Mr Howells suggested any company thinking of trading with Dalgety might want to get an explanation for the figures first.

Dalgety chief executive officer, Tony Taylor, said any attempt to use these figures to portray the company in a bad light was entirely spurious. "Dalgety Group is the ultimate holding group and has a very strong balance sheet. Its accounts are the only ones that matter. I think all the credit agencies would be aware of that."

According to Mr Taylor, Dalgety Groups losses were actually £3.7m after tax. "Even this was very disappointing, but I can say emphatically we did not lose £19m."

Much of the disparity between the two balance sheets is down to tax efficient accounting, including an £8m write-off of negative goodwill, claimed Mr Taylor.

"People can take comfort from the fact that all the major companies are still very happy dealing with us." Mr Taylor believes the firm will come close to breaking even this year with a return to profits for the 2002/03 season.

Opinion within the industry was divided on the validity of the rumours. One accountant said he would be very surprised if Dalgety was really in trouble, but others have noted some disquiet among farmers over recent changes at the firm. &#42

Dalgetys business remains strong, and all major companies are happy to deal with the firm, says CEO Tony Taylor.