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Bernard Matthews benefits from BSE

Processed poultry, pork and fish, cooked meats and catering now account for more than 90 per cent of the business of Bernard Matthews, the Norfolk- based meat processor that originally made its name from selling just turkeys.

And all of these products have benefited from the beef crisis, which has shifted consumer preferences to other types of meat.

Beef products made up just a little more than 1 per cent of group turnover and the production line was eventually closed last year.

Bernard Matthews' total turnover rose by 17 per cent last year to pounds 355m, the operating profit rose by 27 per cent to a record pounds 26.9m and, even after a 60 per cent jump in interest costs to pounds 4.4m, profits before tax went up 20 per cent to pounds 22.6m.

Although the results, which showed earnings per share climbing by 21 per cent to 12.69p, were comfortably ahead of City forecasts, the shares dipped 5p to 119.5p.

The main concern among investors, who will receive a 20.9 per cent increase to 4.1p in the dividend, is the strength of sterling.

Exports from the UK account for only 5 per cent of Bernard Matthews' sales, but 15 per cent of the profit is generated overseas. And some imported meat products are now more competitively priced in the UK.

The price of imported soya bean meal has also reached record levels in spite of the strong pound.

However, profits in the current year were running ahead of 1996, Bernard Matthews, the chairman, said yesterday.

Capital expenditure, which was mainly spent on building new factories, reached a record pounds 33m, but net debt rose only pounds 19m to pounds 30m.

New factories in the UK and Hungary would start to contribute to profit this year and the Bernhard Bartsch group, bought for pounds 5m last November, would expand both sales and profits, the company said.