The company which operates the largest pig herd in Scotland – Karro Food Group Limited – has blamed declining pig prices for a 13% drop in turnover.
Karro formed two years ago when private equity firm Endless backed employees to take over Dutch giant Vion’s pig farming and processing business in the UK.
This followed Vion’s decision to exit the UK red meat industry, resulting in the closure of Scotland’s main pig slaughtering facility at Hall’s of Broxburn, near Edinburgh.
The firm, which is based in Malton in North Yorkshire, runs the biggest pig herd in Scotland at Brydock, Alvah, Banff. The enterprises comprises around 10,500 outdoor sows and produces 4,600 pigs every week.
According to accounts filed with Companies House, turnover at the firm for the year ended December 26, 2015 was £457.7million.
This compares to a turnover of £527.7million for the year ended December 27, 2014.
The bulk of sales – £387million – were to the UK, while sales to the rest of Europe were worth £55.5million and sales outwith Europe worth £15.2million.
Pre-tax profits at the company were £12.5million, which is up from a pre-tax loss of £12.2million previously.
In a statement with the accounts, the group’s chief financial officer, Michael Kestemont, said: “After two years of significant improvements, Karro Food Group fully transformed in this third year from a company in turnaround to a strong, dynamic and well respected player that is building further on very strong commercial relationship in the UK and globally and investing heavily to ensure all its production facilities are best in class.”
He said the drop in turnover reflected “the impact of a declining pig price and the ‘passthrough’ of that decline to customers”.
In addition, the company was benefitting from the closure of the Wiveliscombe site in Somerset, added Mr Kestemont.
He praised “significant expansion” in the UK and international markets and said this was creating a well-balanced and diversified business that can share carcase balance benefits across its commercial portfolio.
“Karro Food Group is now well placed to deal with the strong competitive pressures that characterise the UK pork industry and is preparing for significant further growth in the years to come,” added Mr Kestemont.
He said the group was confident that 2016 would bring further improvement in the profitability of the business through revenue growth and further operational efficiencies driven by investment and management initiatives.
The accounts revealed the highest-paid director took home a pay cheque of £1million last year – this is up from a salary of £700,000 the year before.