Devenish returns to profit despite £15m hit on sales
BELFAST-based animal nutrition company Devenish has reported a 15 per cent dip in sales in the year to May 2021, yet still returned to profitability.
The company, which carries out pioneering research and development in health and sustainability throughout the food chain, saw revenues fall from £101.2 million to £86.5 million, its latest accounts show.
Devenish reported an operating profit before exceptional costs of £6.4m (up from just shy of £2m in 2020) while its profit before tax swung from a previous year loss of £3.2m into positive territory of £3.1m last year.
Most of those exceptional costs (more than £400,000) relate to extra insurance costs following a fire in November 2019 at its Duncrue Street distribution centre, which burned for several days and impacted its international markets.
"The insurance claim surrounding the fire has been settled and the business has now turned its focus to rebuilding and restoring its growth projectory," the directors said in their strategic report accompanying the results.
"While conditions are expected to remain challenging in the short term, we are satisfied that the appropriate steps are being taken to drive the group performance through commercialising the output of our innovation strategy."
The company said consumer demand for healthy, safe, nutritious food, produced in a transparent and environmentally-conscious manner, continues to increase.
"Our innovation investment is targeted at meeting these challenges and differentiating Devenish in the market," the directors added.
Their report goes on: "While the company has been impacted by market conditions, is has continued to invest in R&D and innovation, and pursue growth opportunities in international markets.
"While the prolonged impact of the fire, the global pandemic and other macro economic factors are expected to subdue growth in the short term, the company is well-positioned for growth going forward."
Earlier this year Devenish unveiled the next step in its strategic growth plans with the opening of a new office and manufacturing facility in the Mexican city of Hermosillo, giving it a permanent base for growing its administrative and operations teams in the region, where it has had a presence since 2014.
Employee numbers at the company have remained generally static over recent years, with 277 staff on its books at year-end (121 in production and 156 in administration).
The company's wages bill reduced over the year to £13,247,997, which on a simple division measure equates to £47,800 per employee. The salary of its highest-paid director shrank from £537,060 to £438,116.
Since its books were closed for the last trading year, the company sold off its Hi Peak Feeds subsidiary, which is acquired in 2013 and which is the U.K.’s largest organic manufacturer of feeds, blends, minerals and speciality products.
Founded in 1952, Devenish has manufacturing sites across Ireland, Britain, the USA, Turkey and Uganda, as well as offices in UAE, Uganda, Mexico, Philippines, Dominican Republic and India.
Devenish executive chairman Owen Brennan is the ultimate controlling party of the company by virtue of his majority shareholding in Devenish (NI) Ltd.