Dungannon-based Linden Foods Ltd has reported operating profits of £2.15m to the year ending September 2020, up slightly on the £2.09m from the previous year.
The beef and sheep processor saw turnover for the year up by over £8m to stand at £208.96m, which leaves an operating profit margin at a thin 1.02%, and slightly reduced from the 1.04% for the year ending September 2019.
That compares to operating profit margins in NI dairy processing which are more typically around 2.5%.
In the notes to the accounts, Linden directors report that the low margins are due to strong cattle prices and an increase in costs as the company put in place new practices and procedures to manage COVID-19.
However, the company also noted that sales demand remained strong throughout the year, particularly for “supermarket-specified livestock”.
Linden Foods is currently run as a joint venture between Fane Valley co-op and ABP Food Group.
In May 2021, it was announced that ABP is to acquire the remaining 50% of shares held by Fane Valley in the Linden business, and also the Fane Valley 50% share of Slaney Foods and Irish Country Meats in the Republic of Ireland.
With competition authorities raising no issues, that deal is expected to be completed after 4 October 2021.
Elsewhere in the other businesses owned by Fane Valley co-op, profit margins tend to be higher than in meat processing.
The largest business by turnover is Fane Valley Feeds, which reported sales of £74.55m for the year ending September 2020. That was down by over £5m on the previous year with COVID-19 and avian influenza hitting demand for poultry feed. However, operating profits were up slightly at £3.38m, leaving an operating profit margin at a solid 4.53%.
The Fane Valley stores business continues to grow, with turnover rising from £38.60m to £42.42m, leaving operating profits at £1.73m and profit margin at 4.2%.
The Whites Speedicook oats business in Tandragee also saw growth, with turnover rising from £14.91m to £17.08m and operating profits up from just £14,833 to £505,988.
In 2019, Fane Valley acquired Monaghan-based duck processor, Silver Hill Foods and Donegal-based feed company, Smyths Daleside along with its subsidiary, Burke Shipping Services. The Fane Valley group of companies also includes two small secondary meat processing businesses in NI – Duncrue Food Processors and Hilton Meat Products.