Grampian Country Food Group News
1 June 2007
The Group Managing Director of Grampian Country Food Group, the UK’s leading independent meat producer, has announced a significant turnaround in the company’s fortunes in the past year as it revealed losses of £32.8 million for the prior year, June 2005 – May 2006.
Eddie Power was appointed in January 2006 to stem spiralling losses and has since implemented a comprehensive recovery strategy which has seen the business return to profitable operations during the past 6 months.
He said: “The year to May 2006 was the most difficult year in the history of the Group. Adverse international conditions together with a cumbersome and costly structure contributed greatly to this position. However, the performance of the Group is now moving firmly in the right direction. Our platform is strong, we are winning new orders from a variety of customers and the business has been turned around to a significant degree.
“The results we are announcing today are historic and do not represent the improved current operational and financial performance of the Group.
“Achieving the turnaround in profitability and cash flow has been a difficult and often painful process, but thanks to the support of our staff, customers and suppliers, Grampian today is in a far healthier position and has a much brighter future.
“I am very confident the performance of the company in the current financial year will show a very sharp contrast to the results we are announcing, which date from over a year ago.”
Much of the losses for the period June 2005 – May 2006 have been attributed to a combination of the introduction of centralised operations at Grampian, increasing raw materials costs, avian influenza and the growing challenge from low-cost overseas competitors having a generally deflationary effect on product prices.
Tangible evidence of the turn-around in the Group’s fortunes over the past 12 months is the expectation that results for the year to the end of May 2007 will show the Group recording a trading profit.
Eddie Power said: “Our key strategy has been to focus on our core skills, do fewer things, but do them better. We have taken complexity out of the business and introduced a new, low cost management structure with clear profit accountability.
“At the same time, we have restructured our manufacturing operations to improve efficiency which unfortunately resulted in a number of factory closures and a significant number of redundancies. These decisions were extremely regrettable but essential in turning around the performance of the Group to the more satisfactory performance currently being achieved.”
The Group’s Final Salary Pension deficit, which is currently in the region of £100 million, has also been a major focus for management and intensive discussions have taken place with a range of stakeholders.
Eddie Power said: “We have now achieved a solution to the pension issues which have built up over recent years. We have just completed an agreement in principle with the Pensions Regulator, Pension Protection Fund, the Pension Scheme Trustees, our Bankers and shareholders that we fundamentally believe is in the best interests of the Scheme members.”