East Anglia: Turkey group Bernard Matthews posts £20.4m annual loss

Bernard Matthews executive chairman David Joll.

Bernard Matthews executive chairman David Joll.

The boss of turkey giant Bernard Matthews has inisted that the company’s turnaround plans are starting to pay off, despite annual results showing a pre-tax loss of £20.4million.

Last year’s severe winter weather and wet spring, combined with rising feed prices, all hit the group’s bottom line, while the restructuring of its Hungarian operation resulted in a £4.3m exceptional charge.

Total sales for the year to June 30 edged higher, to £346.4m from £341.4m, but the group ? which is based at Great Witchingham in Norfolk and also has a major operation at Holton, near Halesworth in Suffolk ? recorded an £11.7m operating loss compared to a £5.3m operating profit last time.

Executive chairman David Joll said the group needed to look at the way it operated to help it return to a more successful path.

“These are clearly disappointing results,” he said. “The company has incurred these losses for a combination of reasons which include significant increases in global grain prices and poor wheat quality impacting bird performance together with one off costs associated with the restructuring of our Hungarian operation.”

However, the period covered by the results pre-dates the group’s decision to bring in turnaround specialists Rutland Partners in a move which will inject more than £20m into the group, and Mr Joll said the business, which is also embarking on a new marketing campaign aimed at mothers, was beginning to see the impact of some of those changes.

“The positive news is that since our year end we have addressed many of these issues and have welcomed Rutland Partners to the business,” he added.

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“With improved trading conditions, and the new injection of capital into the company, we have a greater level of stability and financial headroom to achieve our objective of returning to profitable growth in 2013-14.

“We had the perfect storm of high feed costs globally. The trading figures early this year were very bad ? action was required and action has been taken. I don’t think operationally we were as efficiently structured as we should have been, and the feed and weather has just compounded those problems.

“The reason for bringing Rutland in was to stabilise the business financially and that certainly has been achieved. The reason they made that investment was that we had come up with a three year turnaround plan to show where we believed we could turn the business around back into profit in that period.

“It’s very early days, but we are achieving that model. We are investing in plant and equipment again and we are investing in our farms and factories,” said Mr Joll.