Poultry processor’s profits fall despite rise in sales

by 5m Editor
27 October 2005, at 12:00am

UK - Scot-lad, owner of the Joseph Mitchell poultry processing plant in Forfar, saw pre-tax profits decline during the year to January 1 despite a significant increase in sales. Joseph Mitchell, who jointly owns the company with brothers Mike and Stephen, said yesterday that the firm&#39;s profit margins had been held back by an increase in the number of people employed and rises in the cost of live chickens. As a result, pre-tax profits dipped to £2.4m from £3.2m previously, despite a near-23% rise in turnover to £35.5m. During the year under review, Scot-Lad opened a £2m extension to its Challenger Foods&#39; subsidiary in Sunderland. This doubled capacity at the plant, which supplies poultry products to sandwich-makers. Despite this setback, Joseph Mitchell said the new business wins would eventually lead to higher profits in the future. Asked about the profit margins, he said Scot-Lad had &quot;addressed those issues in the current year&quot;. The three brothers bought the business back from mini-conglomerate Saltire in 1997 by means of a £5.5m buy-out. They no longer owe any money from that deal, but are still carrying debt from the subsequent £3.3m acquisition of Challenger. Joseph Mitchell refused to be drawn on what effect the potential bird flu crisis was having on Scot-Lad&#39;s business. This was despite reports that the consumer market for poultry in some continental European markets has collapsed. &quot;I don&#39;t think it is for me to comment on that,&quot; he said. &quot;There have been lots of commentators saying various and sundry things, so I don&#39;t think we want to add anything to that.&quot; During the financial year just completed, directors chose not to pay themselves any dividend. Mitchell described this as a &quot;personal decision&quot; by the brothers, who shared a total of £75,000 in dividend pay-outs in the preceding year. <i>Source: The Herald</i>

5m Editor