Oaklands Farm Eggs has reported a sharp drop in profits in the face of a challenging retail market, the latest figures posted to Companies House have revealed.
Despite this, the company says it has met its target of becoming the largest integrated producer of colony eggs in the UK.
The most recent set of accounts, which cover the 12 months to 31 March 2014, report a fall of some £7m in profit before tax to just £650,000, when compared with the previous year.
Turnover dropped from £63.2m to £58.5m, while the cost of procuring eggs rose from £45.8m to £48.2m.
A competitive retail environment was cited as the primary factor for the profit fall. The financials say: “We have had to walk away from accounts that are not sustainable at farm level.”
The directors’ report adds that investment was made in Oaklands’ contract free-range egg suppliers unable to secure finance “despite being sound businesses”, with a view to securing long-term supply.
Further risks outlined include volatility in grain markets, continued pressure on the free-range egg price, and wider factors influencing consumption.
Directors said the business had continued to purchase arable land, and was storing more grain to mitigate feed costs, as well as seeking to cut cost by investing in green technology.
They added that, given that the investment in colony farms was complete, a priority would be to “communicate the benefits… that these eggs provide possibly the highest-quality, lowest-cost protein food today”.
A further 17 staff were added to the company books over the period, taking the total to 188.
A final note in the report was the company’s intention to continue to promote its “produced and packed in Wales” initiative with retailers and food service in the country.