A combination of higher feed costs, slower bird growth and a tough economic environment meant turkey producer Bernard Matthews Farms made a loss in the 18 months to July 2011.
Turnover for the period came to £471m, compared with £330m in the 12 months to January 2010, but the company made an operating loss of £6.6m, compared with a £2.5m profit in the previous accounting period.
But the business has turned things around since then.
“Nine months into our current financial year and I am pleased to report that the UK business is showing some encouraging results, with profits having recovered to their highest levels since 2006,” said chief executive Noel Bartram.
“Trading over Christmas 2011 was strong and we are increasing the capital investment in the UK business significantly.”
The focus is on championing turkey as a healthy meat and advocating greater consumption all year round.
“We believe there remains significant potential for growing turkey consumption in the UK,” said Mr Bartram. “Turkey consumption per capita in the UK is only a third of that in the USA and less than half of that in France, Germany and Italy.
“That said, the economic outlook remains uncertain and household spending continues to be squeezed. In light of this, we continue to review our cost base.”
The latest financials reflect both physical and economic challenges. Bird growth rates were slowed by the harsh winter of 2010-11, while higher feed costs hit margins. The European market was especially tough.
Hungarian subsidiary Saga incurred an exceptional charge of £1.5m in respect of restructuring costs and the company made an impairment provision of £16m, reflecting a revised value of the assets.
The Bernard Matthews Group
Bernard Matthews is a totally integrated food business based in Norfolk, employing just over 2,100 people and producing seven million turkeys a year.
This wholly-owned subsidiary is a leading turkey farmer and meat producer in Hungary, selling fresh, cooked and frozen cuts of meat into central European markets.
Bernard Matthews Oldenburg
Headquartered in northern Germany, BMO sells fresh, cooked and frozen poultry products on the German market and to bordering European countries.
Established in 1980, Lincs Turkeys specialises in free-range and fresh turkey products. It was acquired by Bernard Matthews in April 2010 and today produces about one million turkeys a year.