Borthwick prospects in U.S.

Press, 22 January 1979, Page 12

Borthwick prospects in U.S.

Commercial

’ Thomas Borthwick and: Sons, Ltd, has good pros-' pects for beef sales in the! 'United States and for profit in the meat retail activities,! says the chairman (Dr W. A. Bullen) in the annual report. Coupled with the growth iof the group's flavours business in the United Kingdom. I the company faces the future with confidence, he says. ‘‘lt is notoriously difficult to make short-term forecasts in the international meat trade. “Nevertheless, the one major factor is the change in the numerical state of beef herds.

“In the United States and Australia, the last three years have seen falling cattle numbers. In the United States this has meant increasing meat prices facing the consumer.

“Thus President Carter increased the volume of .imported beef this year to help curb inflation. “In Australia, on the other hand, shortening cattle supplies mean the company has to pay higher prices for livestock,” Dr Bullen says.

Pressure has been put on

the Japanese by the Austra-i lian and New Zealand Gov-' emments, and “we shallprobably see a steady, al-j though slow, increase in the I quota tonnage in the future.” The company has continued its strategy of broadening the base of its activi- ; ties by widening the product | range, spreading geogra-1 phically, and moving closer! to the consumer, Dr Bullen’ Isays. I “Whilst benefiting from i traditional international i meat processing and trading, the company aims to become I gradually less vulnerable to its profit volatility.

“The business now comprises of not only purchasing and processing of livestock and global marketing of meat and by-products, but also two substantial and profitable retail butcher operations, a medium sized food manufacturer, which after recent reconstruction should show improved results, and a highly profitable and fast growing flavours and essences business. Three sectors marred a good year including loss

imakmg in New Zealand pro-; l cessing operations, plagued;! ■by industrial strife. it However, Dr Bullen seems < | optimistic about the outcome I •of the agreement between the freezing companies andp ■ the unions. “Three is substantial evidence of an all-round aim inii :iNew Zealand to avoid stop • ■ (pages of the immensley ■(damaging kind experienced' i last year.

Sales rose 26.3 per cent to’ E512.2M in the year to September 30, but pre-tax profit actually? fell 2.8 per cent to £6.2M. The group net profit rose [27.5 per ceiit to 4.6 M, after 'providing 367,000 less for ’ tax and £574,000 more for minority interests. ■ The dividend of 6.2 p a ■share required £2.796,000 and was covered 1.6 times ’by the profit.