Matthews' wings clipped: Bird-dumping slashes profits at poultry group
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Your support makes all the difference.DUMPING of birds by US and Continental European producers helped drive down profits at Bernard Matthews, the poultry group.
Matthews made pounds 3.3m before tax in 1992, against pounds 13.2m the previous year, a 75 per cent drop. The company had warned when the interim results were announced that profits for the year would be halved.
But the chairman, Bernard Matthews, said that the devaluation of sterling had helped, and US producers were no longer flooding the market with below- cost birds. 'We don't expect to have the problems we had last year,' he said. 'All the major poultry companies in Europe lost money doing this, as did we. I think the Continental producers have learned a lesson.'
The bright spot for the group was value-added turkey products where profits increased. Mr Matthews said the company's European strategy was proceeding and that the development costs of entering the French market had been written off.
He would not say what these costs amounted to beyond 'a substantial sum of money'. He said Matthews planned to spend heavily on marketing in France this year but did not expect to see a return until 1994.
The company also announced the acquisition of Sarvari Baromfiipari, a Hungarian poultry company, for pounds 2.7m cash. Mr Matthews said this would fit into the European strategy, serving markets in Hungary, Switzerland, Austria and Italy. It had net assets of pounds 12.3m and made pre-tax profits of pounds 181,000 in the six months to 30 June.
Earnings per share slumped to 1.64p (6.95p) and the final dividend was halved to 1.25p, making a total of 2.25p (4.5p). The shares, 40 per cent of which are owned by Mr Matthews, rose 1p to 52p.
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