Business

Food giants Dunbia and Avondale post combined profits of £10m after stellar trading years

The Dunbia Group made a bottom line profit of £5.5m in 2016
Gary McDonald Business Editor

THE year designated by the Stormont government to celebrate food and drink has ended with two of Northern Ireland's leading agri-food firms - Dunbia and Avondale - posting stellar trading figures.

And it's understood another clutch of companies in the £5 billion-a-year food sector - which directly employs 22,000 people and supports another 75,000 - is set to sign off on record results for 2016.

Tourism NI, which ploughed more than £1 million into initiatives around the special year, is also due to release figures in the coming weeks revealing how the region fared against its targets of increasing export sales to £30m, leading to a 5 per cent increase in visitor satisfaction and gain £10m in "positive PR".

Anecdotally, though, it's thought the year-long initiative promoting the north's reputation for excellence in food production and hospitality should eclipse those targets and has potentially created a lasting legacy by helping inspire future generations of farmers, chefs and producers in the region.

Two behemoths of the food industry has weighed in with a combined sales total in the last year of nearly £840 million and total profits in the region of £10 million.

Red meat giant Dunbia in Dungannon, which in November sold its pork business in Ballymena to British firm Cranswick for £18m, made a bottom-line profit of £5.5 million.

That came on a turnover of £787.5 million, which was down nearly 5 per cent on the previous year (£826.5m) which the company said was driven by a deflation in the price of livestock.

Dunbia, like many rival operators in the meat processing sector, operates on a wafer-thin operating profit margin, though this did increase slightly over the last year from 1.09 per cent to 1.17 per cent.

In a statement accompanying its accounts, the directors said: "Improved gross profit and operating profit margin percentages are the result of a continued focus on margins and improvements in productivity.

"While the group and the industry as a whole have battled with fluctuating livestock prices, we have been able to work closely with customers in retaining gross profit margin and will continue to do so.

"The focus each and every period is heavily weighted towards maintaining a stable, high-quality supplier base."

Dunbia, founded in 1976 by brothers Jim and Jack Dobson, also increased its staff numbers by more than 100 to 3,778 (of whom 3,463 are in production and distribution and the remainder in administration), which gave the company an annual wages bill of close to £78 million.

The group has a defined pension scheme for certain employees, and Dunbia's total pension cost in 2016 rose to £893,00 (up from £519,000 in 2015).

Dunbia started life as a red meat processor, primarily beef, but has now grown its reach across the wider meat industry. It operates from sites across Britain and Ireland, with 1,200 of its workers based at 10 sites in Northern Ireland exporting beef, lamb and pork all over the world.

Meanwhile Lurgan food firm Avondale is enjoying a major growth spurt after its latest financials revealed a 4.5 per cent uplift in turnover - up from £48.9 million to £51.1m.

The company - whose clients include virtually every major supermarket chain in Britain and Ireland including Waitrose, Marks & Spencer, Sainsbury, Tesco and Morrisons - is one of the UK's leading manufacturers and suppliers of coleslaw, wet salads, side salads, vegetable accompaniments, soups, sauces and mayonnaise to retail and food-service customers.

Avondale's gross profit on its 2015/2016 turnover came in at £10.0m (down a shade from the £11.1m mark 12 months earlier), but its bottom line profit spiralled almost tenfold, soaring from £459,796 to £4.3 million.

Retained earnings at the end of the year jumped from £17.3m to £20.1m

Avondale, which is controlled by the Geddis family, had a staff of 425 at year-end (up from 374 in 2015), which led to its wages bill going up from £8.4m to just over £9m.

The directors' remuneration package rose slightly from £417,985 to £425,689.

For the last 25 years Avondale Foods has been trading under the Country Kitchen brand and is renowned for its soup products, especially its traditional vegetable broth.

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