Egg packer Stonegate Farmers has suffered a third successive year of falling profits, as the whole egg sector has come under pressure.
According to annual results lodged with Companies House, net profit after taxation came to just £1.7m from an almost static turnover of £103m in the 12 months to 29 September 2012.
Pre-tax profits were actually slightly higher than 2011, increasing £130,000 to £2.4m. The drop in net profit was caused by the firm’s tax liability jumping to £664,000 – following a £31,000 credit the year before.
The directors’ report says the firm was operating in a challenging environment caused by high feed costs, a volatile supply market and the investment required to install enriched cages.
It also concedes that its producers’ margins were being squeezed. “The large increase in feed costs has had a negative effect on our producers as these costs have not been fully reflected by all our customers,” it says.
“We are working hard with our customers to achieve a reasonable return through the supply chain.”
The report cites both the demand for its product and the availability of credit as key risks to the business, but it adds that: “The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.”
The directors awarded themselves 42% less than last year, with emoluments totaling £350,000.