Bernard Matthews Farms has returned to the black in its latest financial year, despite soaring feed costs and challenging market conditions, but is warning 2013 is going to be a difficult year.
The turkey giant reported profit before tax of £2m for the 12 months to 1 July 2012, having previously lost £28.8m in the 18 months to 3 July 2011.
Bernard Matthews changed its reporting period from 18 months to 12 months in its most recent results, meaning its 2011 and 2012 results are not directly comparable. The £28.8m loss from last year also included a £17.5m exceptional charge due to the value of the company’s Hungarian operations being written down as well as restructuring costs incurred in Hungary.
Operating profit for the 12 months to July stood at £5.3m compared with a £6.6m loss during the 18 months to July 2011. Group sales were down from £470.8m in July 2011 to £341.4m this year.
The company’s CEO, Noel Bartram, said the results were “encouraging” but warned great challenges lay ahead. “We have continued to incur unprecedented feed cost increases and do not envisage such increases abating over the coming year,” he said. “With consumer spending and the wider economy remaining weak, we are cautious on our outlook for the next 12 months.”
Turkey consumption in the UK increased by 4.4% in the 12 months to July, and Bernard Matthews reiterated its ambition to double turkey consumption by 2020. The company said it had a “strong order book” ahead of Christmas 2012 but added trading was challenging. “There continues to be a marked shift in the macroeconomic climate with a significant slow-down in both the UK and Europe,” the company said. “The group is cautious on its outlook for the current financial year, when the full effect of the feed cost increases will be felt.”
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