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While beef finishers saw the prices paid to them slip throughout 2019 amid warnings of depressed consumer demand, it turned out to be a better year for beef processors.
The latest financial results of two of our major beef companies show higher returns than in previous years.
In the case of Linden Foods, the Dungannon-based business now jointly owned by Fane Valley co-op and ABP Food Group, operating profit margin increased to sit at 1.04% for the year ending September 2019. While turnover was down slightly to £200.7m, the company finished the year with pre-tax profits of £1.65m, up 10% year-on-year.
Omagh-based Foyle Food Group also reported positive results, this time for the year ending December 2019. Turnover hit a new record of £370.7m, with operating profit margin increasing from 1.17% to 1.87%, and pre-tax profits of just under £5.2m, more than double the figure from the previous year. That left a profit after tax of £4.27m, the highest the company has recorded since 2006.
Among the other beef processors in NI, with Dunbia now owned by the Dawn Meats Group it has joined the likes of ABP Food Group and WD Meats as private unlimited companies that do not publicly report results.
However, while the figures presented by Linden and Foyle point to higher profits made last year, they also confirm that beef processing continues to be a high-turnover, low-margin business (see pages 20 and 21). Operating profit margins are also behind those recently reported by dairy companies (Dale Farm at 2.4%; Lakeland Dairies at 2%).
Input suppliers
Meanwhile, results published for Fane Valley-owned companies show higher profit margins in input supply businesses. The Fane Valley Feeds business reported a 4.2% operating profit margin for the year ending September 2019, although that was down from the 6.1% in the previous year. While higher feed prices saw turnover up over £3m to hit £79.98m, reduced tonnages for ruminants and pigs hit returns, and pre-tax profits fell from £4.6m to £3.2m.
In the Fane Valley Stores business, operating profit margins are at 3.3%. The business continues to grow, with turnover at £38.6m and pre-tax profits of £1.29m.
Elsewhere, one of the largest input supply companies in NI, animal feed company John Thompson and sons, reported an increased turnover of £213.55m for the year ending July 2019.
Operating profit margins stood at 2.95%, with pre-tax profits down £0.5m to stand at £5.4m.
The company is jointly owned by Belfast-based W&R Barnett Ltd, and Dublin-headquartered Origin Enterprises Plc.
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