SIGNIFICANTLY weakening consumer confidence in the red meat industry and a "shortage of supermarket specified livestock" have contributed to a squeeze on margins at Linden Foods, its latest accounts reveal.
The Dungannon-based processor, a subsidiary of Fane Valley Co-operative Society, saw its turnover fall back from £189.4 million to £182.7 million in the year to last September, when its bottom-line profit almost halved from £1.6 million to £890,013.
But the group's net assets still increased on the previous year, rising from £29.7m to £32.6m, according to the business's returns to Companies House.
The company said that despite the difficult climate within the industry it had continued to invest in capital projects.
It added that the board was confident that the strategic direction of the group would lead to an improvement of results.
Linden Foods employs 1,079 people (970 in processing and the remainder in sales/administration), an increase of more than 150 on the previous year, and its wages bill for the year shot up to £23.6 million.
Linden - which also has an operation at Burradon in England - is part of the £500m-plus turnover Fane Valley Co-op Society, Northern Ireland's biggest farmer owned co-operative and is now one of Ireland’s most progressive agri-food businesses.
If has interests in red meats through Linden and Hilton Meats, porridge oats and breakfast cereal, feed compounding, agricultural supplies, and renewable energy, operating across Europe, with its subsidiary companies including Kettyle Irish Foods, Whites, Slaney Foods, A. Lonhienne, Duncrue Food Processors and Linergy.
Last week Fane Valley Co-op and ABP Food Group announced plans to extend their joint venture relationship to include Linden Foods, with the partnership seeing ABP take a 50 per cent stake in Linden.
Trevor Lockhart, chief executive of Fane Valley Co-op, said: "Linden Foods is a growing company within the UK red meat sector, delivering the highest levels of innovation, quality, service and value to its long established customer base.
"The business continually challenges the way it works, seeking out new ways to advance and improve. Our experience of working closely with ABP Food Group in the Republic of Ireland has been extremely positive and we now wish to build on this success."
He added: "The joint venture, which will continue to trade as Linden Foods under the current management team, will ensure that the business can capitalise on new commercial growth opportunities within both the domestic and international market place.
"The involvement of ABP will strengthen our global sales network and assist in ensuring Linden maximises the returns from all parts of the animal, including the 5th quarter. This will be a pre-requisite to delivering sustainable returns to primary producers in a post-Brexit era."
