Foyle Foods saw profits slip in months before it axed Cookstown plant
PRE-TAX profits at one of Ireland's largest meat processors fell by 35 per cent in the months before it took the decision to axe 80 jobs in Cookstown, new accounts show.
Foyle Food Group is the largest single dedicated beef processor on the island of Ireland. It announced the decision to close its deboning facility at Derryloran Industrial Estate in July.
A new company report made public in recent days, show that while the company remained profitable in the 12 months to December 31 2018, its operating profit margin shrank to 1.2 per cent last year.
Owned by the Acheson family, Foyle Food Group operates from seven sites in Ulster including Omagh and Derry. It also runs two facilities in England.
The group processes around 7,500 cattle every week.
Its revenues continued to grow last year to £361 million, but the group's turnover growth slowed considerably in 2018 from the 15 per cent rise it reported in 2017.
Foyle Food Group's pre-tax profits also fell by 35 per cent from £3.95m to £2.57m last year.
The latest company report show the company saw its cost of sales increase by £9.5m in 2018, with distribution costs passing the £10m mark, while administrative expenses were also up.
It all left the group with a smaller profit margin at the end of December.
The report, which was approved by the group's directors last week, acknowledged that the closure of its Cookstown facility was the result of efforts to cut costs across the company.
“The decision was taken due to consolidation of the group's operations across its larger and more modern UK wide facilities where it has made significant investment in recent years.
“Whilst regrettable, closing the Cookstown facility was necessary in order to remain a market leader within the competitive red meat sector. The closure has resulted in initial one off costs, which will be offset by immediate and ongoing cost savings going forward.”
Although the closure of the Co Tyrone plant resulted in around 80 job losses, the Foyle Food Group added 77 new employees to its book in 2018. It left the meat processor with a total of 1,271 staff at the end of December, with total staff costs rising to £31.9m for the year.
Meanwhile, the group's directors, received combined remuneration worth £1.06m in 2018.