Bigger profits on lower sales for Stonegate

Improved efficiencies and lower costs enabled Stonegate Farmers, the UK’s second biggest egg producer/packer, to increase profits despite reduced sales in 2010.

Annual results for the year to 2 October, lodged with Companies House, show that the company saw turnover drop from £134.5m to £123.3m, reflecting in part the fall in the price of eggs in 2010.

With the cost of sales also down, overall gross profit rose from £9.7m to £12.1m, while profit on ordinary activities after taxation, (and after taking into account administrative expenses, other income and interest payments), was up from £1.5m to £4.1m. Directors’ emoluments came to £250,000 each.

“During this period where the market has been particularly tough, the company undertook a review focusing on improving efficiencies, reducing costs and utilising resources more efficiently,” said the directors’ report. “This has played an important part in helping the company protect its margins and offset increases in the price of inputs.”

The report goes on to comment on the challenge Stonegate Farmers faces in meeting the demands of retailers by having the correct supply and type of egg. “The group is very aware of current trends to move to free range and organic eggs, and continues to actively manage the supply from this area.”

It adds that “the volatility of commodity prices, particularly wheat, is a constant challenge for the group, mitigated by strong relationships with the retailers and suppliers”.