McCarrens lift profits and drive exports

PIGMEAT export company McCarren and Co Ltd increased turnover and profits in 2006. In the past week the family-owned firm announced plans for further expansion and plans for targeting of sales into the value added markets on the Continent.

The number of pigmeat slaughter outlets in the country has fallen sharply in recent years following closure of small abattoirs and a number of bigger plants in both the Republic and Northern Ireland.

Capacity across the two jurisdictions is more closely aligned to slaughter numbers than ever before. This brings its own risks.

Although one of the smaller plants, McCarrens played a vital role some years ago when a fire at the Lovell and Christmas plant in Northern Ireland resulted in an overhang of finished pigs in the north Leinster area, which producers could not sell. As a result, pig producers are very conscious of the balance between output and slaughter capacity.

Profit

The firm is operating profitably. It reported pre-tax profit of €491,766 for 2006, up from €384,505 the previous year. The profit and loss account (see above) indicates that turnover - which is not disclosed - increased.

Gross profit rose by 37%. Operational costs and expenses rose in line. Administration expenses rose by 39%, distribution costs by 33%.

The balance sheet is reasonably comfortable - typical of the high working capital requirements of the meat business, total current liabilities match total current assets.

Total bank and lease debt stood at €3.2 million in 2006, of which €2.5 million was short-term bank lending to cover daily operations and the balance of €0.7 million longer term debt and leases. This was a modest increase on 2005 when total debt stood at €3.0 million, of which €2.3 million was short-term bank debt and €0.7 longer term debt and leases.

With shareholders' funds standing at €2.4 million, this left gearing at 57%, down from 61% a year earlier. Net assets stood at €2.4 million, up from €1.9 million.

Expansion plans

McCarrens are now set to spend €2.5m on expansion of their product range and targeting higher value EU markets. This will be mainly selling into the food service, eg. catering, and the manufacturing sectors on the Continent. The expansion will create 40 jobs.

The firm is owned by the McCarren family and Andrew McCarren is managing director.

Table 1: McCarrens and Co Profit and Loss (€)

	2006	2005
Gross Profit	1,057,614	772,532
Distribution costs	(23,483)	(17,609)
Administration expenses	(778,360)	(558,572)
Operating Profit	510,815	403,137
Interest	(19,049)	(18,632)
Profit before tax	491,766	384,505
Tax	nil	nil
Profit after tax	491,766	384,505