Poor consumer confidence and high raw material cost increases had a “devastating” effect on ANM’s meat division in 2011, and were mainly to blame for a trading loss of £2.517m last year across the Aberdeen-based group.
This compares with an overall trading profit of £1.027m in 2010 for the farmer-owned co-operative which has moved from a livestock auction-based business to a diverse base spanning livestock and car auctions, several meat businesses, estate agency and event management.
After accounting for other property related write-offs and pension charges, total recognised losses for the group in 2011 were £4.962m against a £1.892m gain in 2010.
Performance varied widely between divisions: in the group’s core operation, Aberdeen & Northern Marts, profits rose to £1.223m in the year ended 31 December 2011, up from £879,000 in 2010.
However, losses at Scotch Premier Meat rose to £1.79m in 2011, from an £18,000 loss the previous year, while Yorkshire Premier Meat lost £1.387m in 2011. More than £1.2m of the Yorkshire Premier Meat losses were at the Sheffield boning plant, which was closed by the group in February this year.
ANM sold its loss making Charcuterie Continental cooked meat business near Glasgow earlier this month.
A balance sheet value of almost £19.3m demonstrated a strong position and did not include substantial property uplifts that would be shown in the 2012 figures, said the company. Group turnover increased from just over £103m to more than £114m. No bonus is proposed to members but a dividend of 2.5% is proposed to be paid on share capital.
Newly appointed chief executive Pat Machray said that despite the trading loss, the overall position of the group remained strong; however, extensive changes would be made and reviews were already under way to stabilise the business.
“The results are hugely disappointing for the membership and for the great tradition of the ANM Group. I am not underestimating the challenges ahead of me as I realise there are no quick fixes and it will take time to put the Group back on an even keel.”
Interest rates paid to members who help fund the group through its loan scheme will rise from 4 April and those with a minimum of 40,000 shares will qualify for new loan rates for six- and 12-month notice periods of 4% and 4.5%, respectively.
ANM is also reducing the amount it offers to farmers to fund store cattle purchases, something which it hoped would be a short-term arrangement. All future agreements will require a 10% deposit but current agreements are not affected by this requirement.