Scotland’s largest red meat processor – J.W. Galloway – plunged into the red despite a boost in turnover during the year to March 2, 2014.
In accounts filed with Companies House this week, the family-owned business which owns Scotbeef, Vivers Scotlamb and Scotbeef (Inverurie), revealed a 175% drop in pre-tax profits to a pre-tax loss of £2.944million.
This was against a 20.8% increase in turnover to £308.891million, from £255.590million previously. UK sales increased by 26% to £262.128million, while exports fell nearly 3% to £46.763million.
The group’s net debt in the year increased by 30.7% to £12.954million.
Last year the company reported a 307% jump in pre-tax profits, following an 85% drop the year before due to difficult trading conditions.
In a report filed with the accounts this week, the group said: “The financial performance was heavily influenced by the steep rise in cattle cost during the early part of the year, which followed the horse meat scandal.
“Retailers involved were reluctant to pass any increase arising in the supply chain on to consumers, other retailers were forced to follow suit, leaving the company to bear the burden of the cost inflation.
“It was not until the second half of the financial year that the imbalance was addressed and profitability returned.”
The accounts also revealed that the highest paid director at the group had their pay packet increased by 39% to £245,000.
Separate accounts for Scotbeef reveal a 154% drop in pre-tax profits to a loss of £2.109million.
This was against a 10.6% increase in turnover to £233.487million. The company’s UK sales increased 13% to £207.555million, while exports fell 6% to £25.932million.
Accounts filed for Annan-based Vivers Scotlamb reveal a 126% drop in pre-tax profits to a loss of £69,000, against a 6.5% increase in turnover to £29.876million.
The accounts state: “The directors are confident that the company is well placed to continue to grow and trade successfully, despite the troubled European economy.”
In October, accounts for Scotbeef Inverurie revealed the company posted losses in excess of £1million in the first 17 months of trading.
The firm, which is a joint venture between J.W. Galloway and north-east farmers’ co-operative ANM Group, posted pre-tax losses of £1.088million. This was against a turnover of £90.069million.