Pound batters Matthews

Click to follow
TURKEY magnate Bernard Matthews was hit hard by the strength of the pound in 1997, as he watched profits at the company that bears his name fall 24 per cent.

The group, whose activities include the production and marketing of meat and fish products as well as insurance, posted profits before tax and exceptional items of pounds 14.1m in the 52 weeks to 28 December, compared with pounds 22.6m in 1996. Earnings per share fell to 6.06p from 12.69p, while the final dividend increased to 2.5p from 2.4p.

"It is all to do with the strength of sterling," David Joll, managing director, said yesterday. "Were it not for the currency rates, our profits would have topped our record year in 1996. It's entirely to do with sterling."

Mr Matthews, who chairs the group, said sales of overseas subsidiaries, up 14 per cent, and a broadening of the business base through the development of the brand name had buoyed the company.

"UK sales of branded added-value products were 8 per cent higher than in the previous year and produced another record profit," he said.

"Our trading conditions in Hungary improved in the second half of 1997 through a combination of lower raw material costs and the opening of our new feed mill. Our German and New Zealand operations show promise for the future but the French market remains difficult," he said.

Mr Joll said the drop in feed prices augured well for 1998. "The price of wheat is extremely important to us and the price is down significantly now. It's a little early to point to numbers, but the year-to-year sales are up in the first 12 weeks."

Mr Joll said the company expects to regain lost ground through new product launches, a more extensive advertising campaign, and further reductions in operating costs.