Dalgety is going back into profit
ARABLE merchant Dalgety claims to have wiped out last years big loss and says it is heading back to profit, thanks to a tough restructuring policy.
Chief executive officer, Tony Taylor, says that unaudited accounts for the year to June 2002 show the Dalgety Group "virtually eliminated" the previous years pre-tax loss of £5.8m. Turnover remained largely unchanged at about £475m.
Dalgety Arable, the companys UK operation, made a loss approaching £0.5m. But this was offset by the companys Polish operation, which turned a profit for the first time in its five-year existence.
"The trade has had a savage time of it in the past couple of years," said Mr Taylor. "Most companies have struggled following the decline in arable farmings fortunes. But, over the past 18 months, we have been restructuring the business, and hopefully we are on track to make a profit in the next 12 months."
Dalgety has swept away its regional structure, and now operates centrally from Newmarket rather than across four separate areas. Revamping the IT systems has also enabled the company to tighten up its administration, reducing the number of centres from five to one.
As well as reducing internal costs, Mr Taylor says the company is now well placed to participate in First 4 Farming, the electronic trading hub which will lead to further efficiencies.
About 200 jobs have been cut, with 470 staff now on the books.
This reorganisation has saved £7.7m in the past two years, £3.4m of it in 2001/02, says Mr Taylor. It will deliver a further £1.5m of savings in the current financial year, he adds.
"While we have worked hard to take costs out, we are spending about £750,000/year in research at Throws Farm so we can continue to deliver good agronomic advice."
The company, whose business affairs have been the subject of a series of rumours circulating the trade over recent months, is keen to kill these off.
As one analyst put it, the company is perceived as having problems in the market-place and being weak. "People are trading with them, but with care." *