Auctioneers count the cost of F&M crisis
Auctioneers count the cost of F&M crisis
AS expected, foot-and-mouth has had a big impact on livestock auctioneers.
Perth-based UA Group has reported a fall in turnover of 16.55% to £4.79m for the six months to July 31, with an operating loss of £538,000. In the same period, operating costs have been cut by 24%.
Due to its reliance on autumn sales UA figures for the first six months tend to show a loss. But this year that operating deficit is 56.6% greater than the £343,539 loss recorded in the first half of 2000.
Nonetheless, David Danson, UA chief executive, remains upbeat. "This is a remarkable result given the strictures that F&M has placed on the whole livestock sector."
With no livestock markets since F&M broke out, the firm was forced to concentrate on farm-to-farm and electronic trading.
Earlier this year, UA also announced it was to focus on three core activities: Livestock marketing, rural estate agency and property development.
"Obviously the outbreak has had an impact on performance, but the results have reinforced our confidence that our strategic direction is the right one," said Mr Danson.
Directors have recommended an interim dividend of 2p an ordinary share.
But Carlisle-based H&H Group reported a profit rise for the year before tax of £265,000 despite F&M, compared with £208,000 last year.
The annual turnover for the group was almost unchanged at £5.7m to June 2001. All but one of the businesses, which includes property, quota transfer, motor auctions, insurance and auction markets, either achieved or improved its profits in the first half of the year before F&M.
The full impact of the crisis was only felt during the last four months of the trading year, said Ian Walker, group chairman. But with "many uncertainties" in the year ahead, the board recommended a reduced final dividend of 4p a share.
Looking ahead to when markets reopen, Mr Walker said additional costs imposed by DEFRA would eventually fall on producers and that alternative methods of trading based on descriptive screen selling, web auctions and private sales would become the norm.
"It is unlikely that livestock markets will ever be able to operate as flexibly as they did up to February this year," said Mr Walker. *