Strong casein returns lift North Cork's profit

By Eric Donald

North Cork Co-op has lifted its pre tax profits by 68.9 per cent to €1.22 million for 2001.

Sales at the Kanturk based co-op increased by 7.5 per cent to €22.5 million. The co-op enjoyed a strong operating performance last year, with the operating margin increasing from 3.1 per cent to 5.0 per cent.

Bonus shares worth a total of £15,000 (€19,050) were issued to those farmer members who bought their feed and fertilizer from the co-op. Shareholders were also paid dividends on their existing shares worth a total of £14,000 (€17,780).

In February, the co-op's 200 milk suppliers were paid an end of year bonus which was the equivalent of around 3 pence per gallon of milk supplied.

Higher than expected milk deliveries in the autumn helped to generate funds to pay this level of bonus.

The lift in the co-op's sales was mainly due to stronger casein prices. General manager Sean McAuliffe said that the co-op's good performance was helped by improved market returns which saw casein process improving during the year before falling back towards the year end.

He said that returns for butter were disappointing and the liquid milk market continues to be remain highly competitive.

North cork process around 10 million gallons with close to 2.5 million gallons of this bought in from other co-ops, which helps to maximise the throughput of the plant.

Sales of feed and fertilizer were up, mainly due to the animal movement restrictions imposed as a preventative measure against foot and mouth last spring.

These left many farmers with more stock to feed than they would normally have at that time of the year. Store sales lifted as a result by around €380,900 (£300,000)

The co-op has made some improvements to their casein plant during the closed period this winter. A further investment will be made at the end of this current season.

The co-op's balance sheet shows total shareholders funds were €7.96 million at the end of December 2001, up from €6.88 million at the end of the previous year. bank borrowings increased from €191,730 to €432,980

Purcells clear NIB loan

Purcell Brothers Limited have now fully repaid the £5.6 million loan from NIB that was the subject of a court case between the two parties in 2000. The debt arose due to currency speculation by the then managing director Gerry Purcell.

In February of this year the company repaid £4.6 million to NIB having paid £1 million in March of last year. NIB had a first charge on the company's land at Newrath and Gracedieu. The total sum repaid is lower than £6.4 million which was the figure revealed at the time of the court proceedings in 2000.

The latest set of accounts lodged in the companies office last month, bear all the scars of that difficult time for the company. The result for the 14 month period to the end of August 2000, shows that there was a cash outflow from the company of £14.3 million. The loss on foreign currency was £12.66 million, while investments of £1.38 million were written down.

The company had to sell land for £6.17 million and shares worth £1.04 million to meet these liabilities. The balance sheet shows that cash in the bank is down from £2.85 million to £127,860.

After this additional income is taken into account, the profit and loss account shows a loss of £7.51 million for the period.

Shareholders funds fell from £9.29 million at the end of June 1999 down to a negative balance of £1.60 million. A new long term loan for £5.3 million has been taken out after the year end to leave capital and reserves of £3.7 million.

The company's net debt on August 31, 2000 was £13.76 million.

The accounts were signed by Seamus Purcell and by Gerry Purcell as lawful attorney for Patrick Purcell. Gerry Purcell resigned as a director of the company in October 2000. The three equal shareholders in the company are Patrick, Gerard and Philomena Purcell.